New ANZ research has underline the huge performance potential of the red meat industry, but also identified significant barriers that need to be overcome if it is to once again be a driving force in the New Zealand economy.
The annual ANZ Privately Owned Business Barometer survey found the top performing farmers were achieving returns on investment that outshone almost any other producers in New Zealand. However, a larger number of farms were achieving more modest return and comparatively flat growth.
“The red meat industry is at a tipping point,” says Graham Turley, managing director commercial and agri at ANZ. “The world wants New Zealand red meat and high performing farmers are taking full advantage of that with returns that are among the best of any agri sector in the country.
“The challenge now is to narrow the range of performance across the industry. High performers have confidence in the future of the industry and they back their ability to make a difference to the productivity of their businesses,” he said.
Key findings from the report were:
- 26 percent of red meat respondents were very optimistic about the New Zealand economy over the next three years (compared to 38 percent for dairy, 39 percent for commercial)
- 32 percent of red meat respondents were very optimistic about the prospects for their sector over the next three years (44 percent for dairy, 43 percent for commercial)
- 74 percent of red meat farms were family-owned businesses, 10 percent were Māori businesses or Māori-owned businesses.
- 70 percent of respondents identified succession as an issue – higher than any other sector, including dairy (60 percent)
- 42 percent of red meat farms benchmark against similar farms annually (36 percent for dairy)
- Improving pasture and forage was the most popular investment to increase farm production (69 percent), followed by new fencing (59 percent), increasing fertiliser application (53 percent) and improved animal genetics (46 percent).
“In addition to addressing the ageing farmer population and post farm-gate structure of the industry, increasing sector confidence and willingness to invest in the productivity and efficiency of their businesses will be key to realising the incredible opportunities available,” says Turley.
While the meat industry agrees on the need for more integration between farmers, processors and the market, the survey found a widespread belief that there was insufficient progress towards this.
“We see the red meat industry as part way into a real success story,” says Turley. “The challenge remains how to get greater uptake and follow through on initiatives to take it the rest of the way.”
The 2015 survey was completed by 275 red meat businesses, varying in size, location and structure and was followed up by Focus Groups throughout New Zealand. The survey was part of ANZ’s contribution to Beef + Lamb NZ’s Red Meat Profit Partnership, a collaborative programme that brings together participants from across the red meat sector to help the industry become more profitable and productive.
Read more and download a full copy of the report here. It’s well worth a read!