Monday, 21 July 2014 14:48

Sheep and beef farmers regain mojo

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THE RED meat sector is showing signs of putting decades of low profits and lack of reinvestment behind it.

According to the just-released ANZ privately owned business barometer survey, beef and sheep farmers are regaining a starring role in the New Zealand economy.

Over the past two decades red meat farmers have not enjoyed the same stellar gains as dairy farmers due to decreasing real prices, increasing costs, lack of reinvestment and an industry structure that did not encourage collaboration or economies of scale, it says.

The ANZ survey of 779 farmers, including 374 red meat farmers and discussion groups found that most participants were planning investment in their farms to increase productivity and take advantage of rising global demand for protein.

"The survey found the sector was confident that conditions were right to regain some of the lost momentum and play a bigger role in the New Zealand economy," says Graham Turley, managing director commercial & agri for ANZ Bank NZ.

"Farmers we spoke to had active strategies in place to take advantage of rising global demand for protein, and advances in agronomy and genetics to increase production.
"While structural issues within the industry remain unresolved, many farmers have an expectation that solutions are emerging that will lead to better integrated supply chains."

The report says 65% of red meat farmers plan to increase production in next 3-5 years; of these 84% plan to invest in pasture and 69% in animal genetics. About 53% see benefit in getting expert help in improving farm.

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