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.
Calling it “the biggest issue in front of us,” Grant refers to underlying changes in attitudes to eating meat.
He told a recent red meat sector conference in Christchurch that an Oxford University report had essentially said if you want to save the planet, stop eating meat.
This was the main topic of general conversation he heard while “sitting in the pub in Kensington”.
“They genuinely believe they have to do something,” Grant said.
He says “sticky times” lie ahead and the meat industry must collectively address consumers’ attitudes.
The UK and Europe is a mature market with not a lot of growth in it, so “we should be thankful for North Asia,” he said.
Grant says consumer patterns are continuously changing, eg new apartment blocks are being built in London with only kitchen microwave ovens, and a lot of food is bought ready to eat.
Only 0.5% of UK are vegan and 5% are vegetarian, but 7% are ‘flexitarian’, ie they eat two meat meals a week, but that has come from zero in five years.
Grant, a farmer, businessman, former National Party MP and former chairman of AgResearch and Beef + Lamb NZ, was appointed 15 months ago by BLNZ and the Meat Industry Association to help manage NZ’s red meat sector response to Brexit.
He says the UK is trying to get out of “what can only be described as a bugger’s muddle”.
“The lovely thing about Brexit is that you can predict anything about what the model might look like going forward and you’ve got about a 50% chance of being right,” he told the conference.
“There are no experts on this because it has changed every day and every week.”
Grant believes the simplicity of new UK Prime Minister Boris Johnson’s pro Brexit message “has some breakthrough”.
Johnson has strongly argued for a no-deal exit.
“I’m not saying this is a good or bad thing, but we’ve needed a circuit breaker of some kind and, looking at the candidates, Boris was the one who looked most likely to be [the circuit breaker].”
No deal will be brutal
The impact of a no-deal Brexit will be brutal for the UK meat industry, Grant says.
About 35-45% of Welsh lamb goes to France, but won’t if the UK crashes out and WTO rules kick in, imposing tariffs of 48-55%.
Johnson’s new minister in charge of Brexit planning, Michael Gove, has said the market would be propped up in some way, but Grant had been unable to find out what that might mean, and any regime would have an impact on prices.
A fundamental issue is the Irish backstop, Grant says.
Under the Good Friday peace agreement there were 320 border crossings between Ireland and Northern Ireland, with no physical controls, and nobody wanted to put the border back up.
About 330,000 tonnes of Irish beef goes annually to the UK. Under a no-deal Brexit it would be subject to tariffs, but Irish beef farmers know they could illegally dodge the tariff by taking it into Northern Ireland across the uncontrolled border.
“They will, in my view, find ways to shift product around,” Grant says.
“There will be delays at Dover. There will be chaos during the initial period but eventually for our industry it will get better.”
