MANAGEMENT How the haka changed packhouses. PAGE 30-31
MACHINERY T4 tractor series goes to Tier 4. PAGE 42
RURALNEWS
NEWS Despite contrary claims, the live export of sheep to Mexico has been a great success.
PAGE 10-11
TO ALL FARMERS, FOR ALL FARMERS
JULY 14, 2015: ISSUE 588
www.ruralnews.co.nz
Merger no ‘game changer’ “We have a clear strategy that we articulate publicly and that’s what we’re pamelat@ruralnews.co.nz pushing on with. “If there is the opportunity to do CONSOLIDATING ALL the processors and the resultant gain of $10/lamb something in terms of taking out progain at the farmgate, as estimated by cessing and overhead costs, we will Meat Industry Excellence, is still not a consider that. But that in itself is not “game changer” for sheep farmers, says a strategy; just reducing costs is not a Silver Fern Farms chief executive Dean strategy; it is an enabler, but not a strategy.” Hamilton. The meat industry will never build And you cannot build a “Fonterra” from the meat industry because there a Fonterra from the ground up, he says. are too many players, Hamilton told Fonterra had 100% of the supply and Rural News, commenting on issues only two co-ops in the end. The meat industry has an enormous array of parraised by disgruntled shareholders. Hamilton says Silver Fern Farms’ ticipants. Hamilton says Meat Industry Excelview is you need a strategy that can conlence’s own analysis shows that if all trol and deliver. PAM TIPA
processors combined, the gain would be $10/lamb, but realistically not all processors would ever combine, so any gain would be less. “Even if you stuck to the $10 if everyone combined, does that change the world for a sheep farmer? It improves it but it doesn’t turn his business from a challenging business to a higher returning business. And that’s why we don’t believe that combination by itself is a strategy. “We have a clear plate-to-pasture strategy of investing in the value chain, creating retail products – seen in supermarkets here and overseas – and investing in branded product into restaurants,” he says. “So the primary
strategy we’re introducing is trying to extract a higher price for the product and share that with our farmer supplier base, so we capture more value in the process and farmer part of that supply chain. “We have been on that journey for five years now, creating the Silver Fern Farm branded product range, and we believe there are higher earnings from that long term. “Does that require the industry to rationalise its capacity? No. Are there benefits from rationalising its capacity? Yes.” Silver Fern Farms will consult with shareholders in August on options for TO PAGE 5
DROUGHT TAKING A TOLL North Canterbury farmers are facing big losses this year due to the ongoing drought impacting the region. Greg Chamberlain, who farms 500ha at Domett, 3km south of Cheviot, is bracing for $500,000 of drought-associated costs and losses. Winter signals the wet season, but the rains have kept away: rainfall over the past 12 months on the farm has been 60% below average. Chamberlain normally has 3000 sheep roaming the paddocks at this time of the year; the farm has only 30 rams left. He sold 1000 ewes and sent another 1300 for grazing. “I have been farming here for 25 years and this is by far the worst dry season for us.” Rural News visited North Canterbury last week – see more on the big dry and the impact it is having on farmers in the region on pages 6-7.
STOCK FIRMS UNDER FIRE LIVESTOCK FIRMS PGG Wrightson, Elders New Zealand (Carrfields) and Rural Livestock are facing claims of price fixing by Commerce Commission. The commission is the country’s competition regulatory agency. On its website it describes its purpose as, “…enforcing legislation that promotes competition in NZ markets and prohibits misleading and deceptive conduct by traders”. It claims that the three livestock firms fixed fees charged during the implementation of the NAIT national livestock tagging scheme. Its consumer protection authority is investigating fees charged during the adoption of the scheme. A spokesman for the commission says it will file proceedings against the three companies and five undisclosed individuals before the end of July. In a statement to Rural News the commission said: “The commission can confirm that its investigation into alleged price fixing by NZ livestock companies is in its final stages. The commission expects to file proceedings against PGG Wrightson, Elders New Zealand and Rural Livestock Ltd and five individuals by the end of July. We cannot comment further at this time.” Last week PGG Wrightson advised that the commission believed it had breached the Commerce Act over how it charged fees during the scheme’s implementation.
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