21 Jan 2014

Fed Farmers meat industry paper challenged

10:17 am on 21 January 2014

A meat company head is taking issue with a Federated Farmers paper on options for the meat industry.

The federation released the discussion paper to its members late last year to get feed-back on what sheep and beef farmers believe should be done to make the industry less fragmented and more profitable.

Options include meat industry restructuring through company mergers, and more co-ordinated processing and marketing.

But Tony Egan, managing director of Waikato-based beef processor and exporter Greenlea Premier Meats, said the paper suffered from a one size fits all approach.

It was a good overview of the debate on the future direction of the meat industry but did not recognise that some companies, including his own, were thriving and profitable, he said.

"The paper frames up the state of the industry as one where there's a lack of profitability, there's fragmentation. It even refers to processing overcapacity as a plague on the industry and commodity production versus value-added consumer products as being very bad.

"I'm just trying to highlight that it's not all bad. It is possible to make money in the meat industry. It is possible to have products that are well regarded and premiums are paid for them and that the supply chain can be efficient and can have very loyal customer base, it is possible to have good working relationships with farmers and to have operational excellence all working along the value chain," Mr Egan said.

The industry did not get it right all the time, and there were examples of it working better in some places than others.

"We shouldn't throw the baby out with the bath water, perhaps, in talking about the industry," he said.

Federated Farmers meat and fibre chairperson Jeanette Maxwell rejected his criticisms, saying some parts of the industry were working well but others were not.

"And in terms of the meat options paper being a one size fits all, I would have to say I really disagree because some of those options aren't about changing the structure of the industry at all," she said.