John McCarthy, Meat Industry Excellence (MIE) chairman, tells Allan Barber that the red meat industry plan is getting near to completion. The initial figures will be out within about three weeks with the final written plan to follow about a month later, so we can expect to have the full output around the end of October.
MIE’s website gives a good précis of what the plan attempts to achieve and the process for getting there. It lists the two key areas of work in hand:
- “Firstly a survey to gauge the level of farmer understanding of processing and marketing models in NZ. We are also seeking their appetite for contracts and or longer term commitments to supply and their views on capturing more from the entire supply chain.
- “Secondly, MIE has engaged highly experienced industry experts to attempt to identify cost savings and/or benefits from across the entire value chain.”
Critical factors or issues the plan will address are:
- How to develop the pathways to reduce capacity?
- Current procurement practices are a major impediment.
- Loyalty in the red meat industry is sadly lacking and restoring ‘two way loyalty’ will be fundamental.
- MIE is developing a road map to explain where the industry is heading over the next 10 years.
- MIE will quantify the stark options farmers and processors face under the status quo.
- MIE will identify how farmers can retain sufficient control of the value chain.
Meanwhile, McCarthy has almost finished a round of meetings with meat company directors and executives to give them a flavour of the objectives and possible conclusions of the plan. He assures me there has been general agreement with the concepts explored and presented as being in the industry’s best interests.
However, my conversations with company executives, although not fully comprehensive, suggest there wasn’t anything specific to disagree with. There were no solid proposals to consider, such as company rationalisation or merger, which is not surprising because of the as yet incomplete programme of work.
It also seems the plan will not be able to address the issue of introducing rationalisation into overseas marketing, because it is too complex an area beyond the initial scope or funding capacity. Therefore, procurement and processing will be the only areas covered at this stage. This isn’t surprising because international sales and marketing is an enormously convoluted network of products, markets, contacts and customers. No single selling structure can hope to replicate this network.
Hopefully, the eventual proposal will be able to resolve a very tricky problem, although it will depend entirely on whether there is a viable method of restructuring procurement and processing. If not, the industry’s marketing will continue to resemble democracy, often characterised as a bad system of government, but still the best there is.
MIE deserves credit for its efforts to develop a more functional industry structure that meets the needs of all parties. The hard work really starts when the plan is out for discussion.