----- Original Message -----
From: "Cowan Dairy" <cowandairy@charter.net>
>
> Dave,
>
> Go back to sleep
Consider that we all might learn from your admitted tendency to "race to the
bottom" as your very own Keith Kelly cites during his July speech. It
isn't only "too many NZ farmers competiting in the same market that drives
prices down". Playing the fools' game of beating each other up for the
privilege of being the low bidder affects all farmers negatively and only
benefits the mega-multinational corporations. I'm glad Keith Kelly sees part
of the problem.
Dave G. WisCOWsin.
Chair of Meat and Fibre Producers
Keith Kelly
Address to Meat and Fibre Conference/AGM
Langham Hotel, Auckland
Delivered at 10.30am, 17 July 2007
--------------------------------------------------------------------------------
Welcome to conference.
Your time here over the next two days is highly valued and much appreciated
by the membership of the meat and fibre industry group and on behalf of
members, thank you for attending this important event in the Federation's
diary.
Conference is important because the meat and fibre industry group is a key
part of Federated Farmers. Just over half of Federated Farmers' members
identify themselves as meat and fibre farmers. The Federation therefore puts
much effort into representing the interests of our sector.
Today I will be speaking about driving farming forward in to a stable and
sustainable future.
Learning from the past and farming for the future is simple common sense.
The question is what can we learn and how can we put that knowledge to work
for us as farmers?
Some of us farmed through the "black time" of the 1970's and 1980's and all
of us must ensure it never returns.
Meat and Fibre producers are currently facing a challenging time - costs are
up and income is down.
Lessons of the past show us we must work together to have a successful
industry. We know from experience that too many New Zealand producers
competing in the same market drives prices down. No one intends it to be a
race to the bottom but that is the result of an uncoordinated effort. We are
in that race now. So let us put on the brakes and make a u-turn for the good
of our industry.
We do not want to go back to the situations of old instead what we can do is
encourage a coordinated approach. Marketing is power. Farmers need to rally
behind the importance of putting in place a coordinated international
approach.
The way forward - marketing
I have participated in many meetings locally, nationally and international,
on lamb prices. The recurring theme is marketing. In my role as chair I have
to ask the hard questions.
And today I ask you: Has the British market been our safety net for so long
we have stopped being inventive in selling product?
We are told by overseas experts the lack of marketing and poor presentation
of our product lets us down. Marketing needs an urgent shake up. John
Turner, chair of the Alliance Group board, was quoted recently saying: "We
have had the same marketing system for a hundred years and it has failed
us."
The world was not brought up on legs of lamb and mint sauce. We need to
cater to international tastes and look at new innovative ways to place our
product on menus around the world.
As an industry we need to decide our stance on marketing and who pays for
what. Under the Commodities Levies Act referendum held three years ago
farmers withdrew their monetary support for generic marketing. This needs to
be reviewed. We know our product is excellent. There needs to be a balance
of responsibility in how it is presented and return for the value invested.
Let us collectively discuss our industry and put guidelines in place,
formulate policies so that we can present a sound well thought out and
united front.
Let us start discussions with regard to Lamb Quota
The allocation of quota has come under fire. Once again an inter island
disagreement on who gets what, and why, is bubbling away. Quota is a
delicate, diplomatic subject and should be treated as one. Failure to
achieve a good return from lamb sold under the present quota system should
be investigated fully.
We currently have a European Union quota for sheep meat and goat meat of
227,854 tonnes. Federated Farmers Meat and Fibre Producers ran a survey on
the quota review held in 2006 and the consensus was not to change.
The Meat Board Act gives the NZ Meat Board the right to allocate export
quota to all registered meat exporters, whether they are currently exporting
meat or not.
Following on from lamb quota
The procurement policies run by South Island co-operatives are under fire.
The sheep farmers that supply lamb and agree to these contracts are the ones
to negotiate a fair to all contract. North Island companies are accused of
spot market selling.
The investigation into the possible amalgamation of PPCS and Alliance will
provide some clarity. If the investigation proposes a merger, 75 percent
shareholder approval is still required, then a stamp of approval from the
Commerce Commission. The next step is to prove to the world that it is not a
monopoly. If all of these actions are approved it could change the face of
the New Zealand lamb trade.
What about beef?
Prime beef must receive prime prices. New Zealand has a European Union quota
for high quality beef of 1,300 tonnes and a US beef and veal quota of 213,
402 tonnes. The fright over BSE is wearing off and Asia is being lobbied to
return to grain-fed American beef. We need to look at the Asian palate and
getting them to acquire a taste for New Zealand grass-fed beef.
I am crystal ball gazing but it is easy to speculate the dairy boom will
result in more second class dairy beef on the market and this could see a
drop in the price of prime beef. We need to ensure prime beef continues to
receive top dollar. For good or bad the rapid rise in milk powder has the
potential to drive calf rearing towards unsustainablity.
Turning now to the processors, meat companies are currently running at an
average profit of one to three percent, which is about the same as farmers.
Farmers need to support meat companies and be wary of demanding too much
from them while their financial state is far from robust.
We also need to be wary of the amalgamation of AgriQuality and Asure New
Zealand in the meat inspection role that has lead to a monopoly with strong
unionist bargaining power.
