New Zealand meat co-operative planned
Open to all NZ sheep and beef farmers, the co-operative, NewCo, which is being set up by the meat industry reform group Meat Industry Excellence (MIE), is said to have the backing of a major bank.
“At the moment farmers are struggling to cover the cost of production let alone make a profit,” said MIE’s chairman John McCarthy. “However, the NewCo idea is still very much in its infancy, and we are miles away from first base at this stage.”
MIE was set up two years ago by NZ red meat farmers worried about poor returns, despite the sector being one of the country’s largest export earners. The total industry, including meat, skins, wool and co-products, has been estimated at being worth $8bn last year by the Ministry for Primary Industries.
In March this year the MIE produced a damning report on the meat industry, which concluded that processing over capacity, over investment in animal procurement compared to investment in marketing, and inadequate spending on marketing was costing the industry an annual $450m. It recommended consolidation of processing, long term supplier contracts and collective closure of plants.
“Under the current system, farmers are like the mouse on the wheel, running to stand still,” said McCarthy. “Farmers are subsidising an inefficient and destructive competitive model beyond the farm gate. And we are losing money doing it. It is a nonsense and a total indictment on the futility of the status quo that in a world crying out for quality protein we receive prices short of the cost of production. It is an indictment on the vision and courage of our leaders that we continue to waste the potential of our provenance, our New Zealandness factor. We have the best story in the world, it’s nuts that we can’t sell it.”
At present, New Zealand has more than 30 different meat exporters, all competing against each other. McCarthy believes that the NewCo co-operative could be turning over $4bn within three to four years and exporting 95% of this under a new and reinvigorated customer-focused branding strategy.
