Clear road map needed for better financial returns

Pastoral farmers need a "good, clear road map" to better financial returns, says Fed Farmers meat and wool section chairman Bruce Wills. "What we need now is a united approach, a pan-industry strategy that will map out a course for the future." At his section's annual meeting in Auckland today, Mr Wills delivered a "report card" - with a B+ grading - on the federation's ambitious campaign to have farmers paid $150 for each lamb they supply reports The ODT. "We can enter longer term supply contracts with our processors, spread our selling season and grow heavier lambs." "Once we have a good inclusive strategy, giving the entire industry a clear understanding of what we need to achieve for a profitable and sustainable future for both sheep and cattle farmers, then I think we will finally deserve that A (grade)," he said. Mr Wills said that nine months ago the average return for a prime lamb was just $55 - in the most unprofitable season for 50 years - which was why the federation has set a target of $150 for a good mid-season lamb within five years. He noted that the target, known as "T150" was never intended to be a silver bullet that would change the dynamics of a dysfunctional industry, but it offered an "aspirational target". But he admitted that much of the lift in lamb returns from $55 to $90 was due to a supply/demand imbalance "and a little help from a softer currency". Challenges facing the meat industry were last week identified in a Ministry of Agriculture and Forestry's report, Meat: The Future. The report said poor performance by people in the meat industry may be to blame for the low profitability of sheep and beef farming, also compounded by drought, fluctuating commodity prices and a high exchange rate. The report did not suggest specific solutions for the industry - but an industry board, M&WNZ, has offered leadership for pulling the industry together on boosting earnings.