Silver Fern Farms CEO sees better days ahead
Despite Silver Fern Farms (SFF) posting a $21 million loss last season, chief executive Dan Boulton believes that better days are coming.
The report takes an “overall look” at the industry and includes costs to farmers and processors of not changing the current structure, which MIE claims is “value-destructive, unsustainable and keeping farmers poor”.
It models estimated savings and other improvements from “consolidating” the industry. A proposed rationalisation of the four largest companies – the two co-ops Silver Fern Farms and Alliance Group, and the privately owned Affco and Anzco – agreeing to a “co-ordinated and managed consolidation process” would save at least $1 billion over five years, MIE claims.
MIE’s report, funded by about $220,000 of Beef + Lamb NZ levy money and prepared by agribusiness consultants, will “comprehensively show the cost of the failings of the current industry structure”, the lobby group says.
MIE also claims its report will show that farmers “overwhelmingly” support a consolidated industry based on a “co-operative model”. The group says research commissioned for the report shows farmers will consider further spending to achieve future gains under such reforms.
The report also calls for urgent attention to over-capacity in the processing sector.
“By over-capacity we mean capacity that’s way beyond what’s needed for drought and other processing peaks. The levels of over-capacity identified are far beyond this.
“MIE’s analysis shows that a procurement model is needed to rebuild trust between farmers and processors and marketers, to enable committed supply.”
The report also details the costs to the industry of third party traders and cartage costs.
The full report, supporting analysis and other reports commissioned on the meat sector are available from tomorrow (March 18) on MIE’s website.
