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Source: ONE News -
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Agriculture officials say poor performance by people in the meat industry may be to blame for the low profitability of sheep and beef farming - in addition to drought, fluctuating commodity prices and a high exchange rate.
"Many people also believe that the industry has been systemically underperforming," the Ministry of Agriculture and Forestry said in it 90-page report, Meat: The Future.
The foresight report provides an analysis of the sector and looks ahead 10 to 15 years, laying out scenarios for how it may be shaped in 2023.
But Meat Industry Association CEO Tim Ritchie, representing meat companies, has rejected suggestions the sector was "broken".
The association produced its own foreword for the 90-page MAF report, identifying medium-term strategic opportunities and challenges.
The meat companies said they had "some difficulty" with any "suggestion that the meat sector is broken or systematically underperforming".
Instead, it suggested the sector provided a textbook model of a free, competitive market, though there was a problem with the relatively low returns from meat and wool compared with dairying.
"While we undoubtedly have a major challenge in the form of land use change ... it is not logical, or fair, to infer that our sector's people or culture of structure or have created that relativity of returns".
The meat companies also argued it was wrong to blame poor returns on their sector meat when income from wool - historically an important part of sheep farm revenues - had stopped contributing to farmers' profitability.
"It is completely inappropriate to attribute farmer profitability complaints solely to the performance of the meat value chain".
They said it was difficult to analyse profitability in a sector where farmers tended to capitalise any wealth gains in land value, and where cooperative shareholders could trade-off returns on their farming assets against those from their investment in meatworks.
Future direction
MAF printed its own foreword, calling for risks and challenges to be overcome - but not offering any specific solutions for the industry, which last year generated $4.6 billion in export earnings.
However, the Meat and Wool New Zealand industry board - which has a significant number of directors appointed by meat companies - says it is pleased agriculture officials have not dictated a "plan of action" for the meat sector.
"Farmers and industry, not government, are best placed to make commercial decisions about their future," Meat and Wool New Zealadn chairman Mike Petersen said.
He was welcoming of the publication, saying it was "vital" that the industry was repositioned to take advantage of trends toward high quality natural products, rising protein prices, growth in developing nations and declining global sheep numbers.
But he conceded that as a sector, "the meat industry has not successfully addressed recurring problems and put in place better planning for the future".
The ministry's deputy director-general, Paul Stocks, noted that
many climate change issues had been excluded from the paper,
because of uncertainty over what impact the international response
to agricultural emissions will have on New Zealand exports.
