Out with dairy, in with beef

Putaruru farmer and former company executive Gray Baldwin sold a dairy farm last month; on another farm he is rearing 400 bull calves.

Baldwin told Rural News beef is showing great potential and he wants more exposure to beef and less to milk. “I see this as a sensible thing to do,” he says.

Baldwin, an LIC and Ballance director, is also keen to take his governance skills to the red meat sector. He will stand in the Alliance director elections later this year; as a supplier of boner cows to Alliance he holds shares in the co-op and is eligible to stand.

Baldwin has started his campaign, last month visiting farmers in Southland and attending the Red Meat Sector Conference in Nelson. 

This has given him “a firming view” of issues facing Alliance, which he says is a great company with a great future; he’s keen to use his governance skills to help the co-op grow.

But he is steering clear of farmer lobby Meat Industry Excellence (MIE), which is pushing for a merger of Alliance and the other major farmer-owned co-op Silver Fern Farms.

While he understands MIE’s objectives, he believes board members should be accountable to the company, not to farmer lobby groups.

“I do not support the idea that as a director you are accountable to some other organisation outside the boardroom,” he says.  “That might work in parliamentary politics – you are Labour or a Green or a National – but it does not work in corporate governance.”

Baldwin says he hasn’t seen any proposal about the merger of the two meat co-ops and doesn’t have a view on it yet. 

But he says if the boards and management make a great case for the short- and long term benefits of a merger he could support it.

“If I were elected to the Alliance board I would be happy to consider any proposal that added to the wealth and wellbeing of its shareholders. Directors are required under company law to act in the best interests of the company they govern. When considering proposals in a board meeting I’m willing to consider the long term, not just the short term benefits.”

With Fonterra struggling to pay a decent milk price to its shareholders he remains cautious about a mega meat co-op.

“Fonterra has chased scale, efficiency, big co-op and mergers and look where they are now. It’s disconcerting as a dairy farmer to see the problems of Fonterra; it makes me cautious about a merger just for the sake of it.”

Two Alliance directors retire by rotation; nominations are expected to open in October.