18 Jun 2014

Reform group sets target price for lamb

11:04 pm on 18 June 2014

The farmer group campaigning for meat industry reform says farmers need to get $8 a kilo for their lambs to be really profitable.

But it says that's not possible under the existing meat industry structure.

The Meat Industry Excellence group has given up the idea of trying to get all the industry stakeholders to a summit to get agreement on restructuring.



MIE chairman John McCarthy and has now reached the conclusion that there are too many barriers in the way of the industry changing itself and if farmers want to change it, they'll have to do it themselves.

He said it's next step will be using a grant from Beef + Lamb New Zealand to commission reports analysing the gains to be made from changing the structure and behaviour of the industry.

"That may be to do around committed or contract supply, it will be to do around principles of co-ordinated marketing - we're going to open the book on the opportunities.

If we want to stop the conversion from sheep and beef into other land uses we need eight dollars a kilo for lamb to have an equivalent profitability for our operations. Currently winter contracts for lamb are offering around $6.40 a kilo. And our contention is that the current industry model cannot deliver that. We need to change the way we're doing business to get to that figure.

Over the next few months we will be producing credibly backed up and analysed figures to support this sort of claim. Then farmers can accurately evaluate where they want to be."

John McCarthy said MIE will also aiming to get more of its supporters on the boards of the two big meat co-operatives, Silver Fern Farms and Alliance.