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Does sheep have a future?

Rural News
Does sheep have a future?

Pressure is building for  Meat Industry reform, that will lead to better profits for farmers that supply it, and a more sustainable future for all involved.

 Latest livestock numbers show the widespead exodus from sheep, and MAF  farm monitoring calculations, show lack of profitability.

Things have got so serious, even the government has suggested it may intervene to help. The last man standing strategy is not working and an industry approach must be taken now, if worthwhile reforms are to be achieved.

Processing  consolidation, industry backed currency hedging, a long term  strategy, a single focused wool industry, and loyalty and leadership, are all needed to turn this sector around. Time is running out.

The Government is promising to assist in the restructuring of the beleaguered meat industry, should it be presented with a credible plan.The industry is weighed down by excess processing capacity, low profitability and falling sheep numbers. Agriculture Minister David Carter said, in the ODT, managed company consolidation, rather than leaving restructuring to market forces, had advantages.

He doubted government assistance would extend to helping pay for plant closures, but the Government could look favourably at a request for a legislation changes to bypass Commerce Commission rules that would otherwise prevent company mergers. Mr Carter acknowledged such a step would require co-operation, something he said strong industry personalities had in the past blocked, but the landscape was shifting and if the industry did not change, the viability of the meat and wool sectors would continue to be undermined.

Farmers and companies are making decisions based on short-term financial gains, leading to competition between meat companies paying above market rates for animals to keep their plants full. Profitability is reliant on the exchange rate. If the rate is low, most parties will make a good living. If it is high, processors and farmers struggle - and they are leaving in droves. But ANZCO and Alliance Group say there is no crisis.

Farmers are leaving the industry for dairying: 340 in Otago and Southland in the last three years and another 250 throughout the South Island expected to change in the next few years .The issuese are reports The ODT - Meat companies paying above market prices for lamb to keep their plants busy, rather than being market-led.- Excess meat processing capacity. - An industry unable to co-operate and lacking leadership. - Farmers not being loyal to meat companies. - Both meat and wool industries lacking a consumer focus. - A decade of little or no promotion of wool. - Competition for land use.

 

 

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3 Comments

Headline sounds suspiciously like the "Is our children learning?" Bush-ism but I understand the need for grammatical parsimony in these trying times ;-)

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Im sick of all the "crisis"headlines surrounding the meat industry at present. Our products are getting record inmarket prices, our competitors are falling by the wayside, demand is far outstripping our ability to supply. This is the sort of criris most industries would love to have! Yes we can do things better which is within our control to fix, absolutely we can. However id suggest if our currency was anywhere near long term avarages we would be getting $120 for lambs and the headlines would be very different!

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Thanks for identifying yourself as a townie Skeeter. That said your opinion on the land prices is irrelevant and you can leave thoses issues to those of us for whom it is relevant. Your analogy re british motorbikes is also completely irrelevant. What part of record inmarket prices and unsatisfied demand do you not comphrehend? The reason sheepmeat is expensive in supermarkets is because it is a scarce and valued product that people are prepared to pay for well over and above that of chicken. As for wool there are several inititives underway which have the potential to significantly  increase the returns to farmers. This is an industry in transition, for sure but prospects are fine thank you very much. 

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