Comment: Behaviour is the root cause of meat industry’s problems

Allan BarberBehaviour is the root cause of many of the red meat industry’s problems, writes Allan Barber in a piece that has recently been published in Angus Cattleman magazine.

In it, he outlines the various moves towards red meat industry reform over the past couple of years, including cooperative merger, tradeable slaughter rights, and he examines why the various options haven’t come to light.

The usual proposals for the seemingly “dysfunctional” industry are rationalising capacity and/or single-desk selling. However, rationalising capacity costs money and is hard to achieve in a free market except through receivership or voluntary plant closure, while adopting a single-desk selling “is naïve and will never work,” he says.

‘Ultimately farmers must get on and do what they are best at, except they must use more logic and do it better.”

His conclusion is that, “unless farmers have very deep pockets they cannot lead and pay for industry restructure, but can adopt farming practices which will lift them up the curve.”

They can do that by using the technology and information available from, among others, the FarmIQ and the Beef + Lamb NZ Ltd Primary Growth Partnership agreements, he suggests.

In addition, farmers should be working with their processor of choice to ensure they are producing livestock to the required specification and delivery, for which they receive a transparently fair price. If farmers are not happy with their arrangement, they should change processor, he adds.

“The way farmers and processors behave in their dealings with each other will have the greatest impact on the future of the meat industry because greater trust will enable both parties to get on with what they are good at. Global market prices will fluctuate as they always have, bit there remains solid demand and eventually profitability will improve.”

Read it in full  …

Allan Barber is a meat industry commentator. He has his own blog Barber’s Meaty Issues and can be contacted by emailing him at allan@barberstrategic.co.nz.

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