Taking care of business
The phrase sounds modest. The implications aren’t.
When Peter Gow and Geoff Henley talk about ‘‘incremental improvements’’ the stakes are higher than they seem.
The context is farming, industry, and undertakings already at such a scale that seemingly small improvements represent big bucks.
Says Henley: ‘‘If we can get small, incremental improvements in the performance of large industries, then that multiplies out to significant benefit’’.
Examples? Here’s just one of a bunch of possibilities under investigation by the SoRDS team aiming to help grow Southland’s GDP.
Gow sees real potential for dairy beef, not just dairy-fed veal but bull beef. Instead of an animal being worth $30 or $40 it could be taken the stage it’s worth $1200 or more.
‘‘So you don’t need a great many and suddenly you’ve got tens of millions of dollars.’’
Fodderbeet provides a really good resource to develop these animals, using feed pads that are empty for a lot of the year, Gow says.
All of which has the added benefit of extending in with the really short meat works seasons down here.
If you can target these animals to be processed during the shoulders of the season, it’s a real plus-plus.
Especially in times of lower milk prices when, adds Henley, you have to look at whether there’s more profit to put the milk down the neck of the calf than to turn it into powder.
Gow agrees: ‘‘It doesn’t take a lot of milk to take a calf up to where it can be weaned. Then they can still go on and become beef later on.
This is not out-of-the-box new thinking, he’s quick to add.
‘‘It is happening. I know guys doing it now.’’
But it cries out for development. How? ‘‘It needs to be led, I believe, by the processing industry. Then you get a proper structure around it.’’
Processing companies could take ownership of the animals, perhaps through contracts targeted to their own requirements.
‘‘That way they can forward sell as well.They know they’ve got the animals.’’
Then there’s the flip side. Their SoRDS team, which has the vast brief of extending business, is also interested in small-scale undertaking with big potential.
Organic farming, certainly, warrant attention. And, perhaps unsurprisingly, sheep milk is being given serious scrutiny, particularly with Asian markets in mind.
Henley: ‘‘We could envisage there being a million sheep in the region being milked in, say 10 or 15 years’ time.’’
In case things are starting to sound too starry-eyed, the talk get steely when they regard the problems inherent with, say the happily conjured-up idea of aircraft flying great quantities of Southland vegetables to Asian markets.
The problem goes beyond just distance to markets.
‘‘We have a huge number of pluses with our climate, but huge constraints as well,’’ Gow says
Winter soil gets so cold that the root vegetables turn starch to sugar big-time. ‘‘Which makes carrots really sweet and is good for potatoes if you’re just eating them. But if you want to process potatoes . . ., they go brown. Too high a sugar level.
‘‘That’s not to say there isn’t a role for vegetables here. But it’s very unlikely to be a silver bullet.’’
The often-quoted truth is as significant now as it ever was: what Southland does particularly well is grow grass. Perhaps we needlessly complicate things at our peril.
Gow, a sheep and beef farmer, now in Winton, previously developed a property in Blackmount and is a former longstanding director of CRT.
Some of the advice he’s been getting of late is a caution against Southland building cost structures into farming that are neither environmentally essential nor sustainable over a long period.
Henley is a Wellington-based business consultant and a central figures in the early development of the strategy, says that with prices down, the emphasis is more on getting costs under control.
Far from skirting the initiatives being developed within industry sectors, there’s a role for SoRDS helping along the Dairy Lean project, or Beef + Lamb’s red meat profit partnership.
‘‘What we’re looking at is can we connect (projects) to the ground, here in Southland. These things are available nationally, but they really work well if they’re tightly connected.’’
Organisations are already trying to do that. SoRDS is trying to assess how it could enhance that.
Gow: ‘‘We’d also like to see Southland produce labelled more and promoted around some of the (tourist industry) areas of Southland, so overseas people coming here and having nice dining experiences will recognise it’s Southland produce they’re eating, and maybe look for it in shelves when they get home.’’
The idea is not to be seen as just commodity producers, but to be meaningfully differentiated as producing high-quality products.
‘‘No one,’’ says Henley, ‘‘has any illusion that in the short term this is suddenly going to produce a premium price in the markets.
‘‘But it’s the sort of thing that, over time, encourages a value-added way of thinking.’’
Forestry? Generally, they’re looking into opportunities for waste wood, though this raises issues of cost structures. And that raises, again, issues of timing.
The potential for a silicon industry would be another of these. Right now, market conditions don’t allow it, says Henley, but it’s important to keep such things in your line of sight.
One of the major constraints for the rural community is digital connectivity. Gow darkens at the memory of four or five cars a day stopping outside his Blackmount mailbox ‘‘because all of a sudden they’ve got cellphone connection.’’
Moreover, the ability to benchmark performances across the country, the region and even between farms --- to be able to send and receive information real time -- has become a necessity. So the entire province needs to champion our need for broadband.
The business extension team reports back to the SoRDS governance group in early August. As with all SoRDS teams, the exercise is intended to refine the agenda for next few years down to just a few, measurable, goals.