22 Jul 2014

MIE not convinced by bank survey

2:09 pm on 22 July 2014

The Meat Industry Excellence (MIE) farmer group campaigning for reform of the sector, is not convinced by a prediction the red meat industry could be heading for a revival.

The suggestion came from the ANZ Bank, based on a survey of almost 800 farmers.

It found most of the sheep and beef farmers who took part in its survey were planning to increase investment in their farms to lift production and take advantage of the rising world demand for protein.

ANZ commercial and agri head Graham Turley said that investment would flow through into increased profitability and productivity, and a stronger red meat sector.

"I think there's a move around people looking to take the industry to another level of greater investment," he said.

"Plus we're starting to see from the MIE and other factions in the red meat sector, that there is great opportunity. They've seen greater demand from China, which creates a little bit of a supply demand issue with traditional markets, prices are lifting and it creates confidence and so therefore they invest and can create more product the way the processing companies want it.

"They can all make more money and grow stronger businesses, so there are a number of stars that are lining up for them."

But MIE chairman John McCarthy said that was not the feedback it was getting from grass-roots farmers, who said nothing would change until the fundamental structure of the meat industry and the way it operated were fixed..

That included livestock procurement and marketing.

"Anything that increases farmer profitabiliy is really good, and if the bank survey is correct that's great that there's a bit of faith," Mr McCarthy said.

"But I think the farmers want to be very careful that we don't take our eye off the ball on the expectation of slightly better returns, because I think if we do, it is reflective of the cyclical nature of the industry that actually drove the MIE into existence.

"Unless we change the fundamentals, those highs and lows, that one good year in three pattern will continue, and in four or five years, there will be another MIE born."