Need to “get our ducks into a row” to lift profitability, says Minister

Minister of Agriculture Damien O’Connor speaking at the Maersk Gala Dinner
Minister of Agriculture Damien O’Connor speaking at the Maersk Gala Dinner

The red meat sector needs to get its ducks into a row to lift profitability, otherwise the Minister of Agriculture says Government will intervene to get fair outcome for all.

In comments made at the Maersk Gala Dinner after the Red Meat Sector Conference the Minister Damien O’Connor acknowledged the contribution from the primary sector to the New Zealand economy.

“We have a very, very good outlook in the short- to medium-term, $42 billion of primary sector exports, $6.6 billion from red meat, thank you again for your efforts,” he said.

However, there are some other threats and opportunities, one being the “incredibly challenging trade environment. O’Connor referred to opening of consultations on the Government’s trade agenda reset to ‘trade for all’ (see www.haveyoursay.mfat.govt.nz).

“Trade is good but it must be for each and every person in our country,” he said.

Another challenge and opportunity is that being presented by alternative protein.

“I think it depends on how we react to it,” he said. In his view, the challenge will be when a discerning customer, who will have to pay more for a high-quality steak, is faced with the choice between a product processed from plants that they have been told is kinder on the environment, or a pure natural bit of protein from the world’s finest country.

“We will either succeed or we will fail. I think it offers a huge opportunity for us, but we’ve got to get our ducks into a row,” he said.

“The sector needs accreditation and systems to show every part of our production systems are up to scratch and are indeed the best in the world and deserving of a premium. When we do that then we will be enjoying the fruits of our efforts.”

The sector also needs to focus on high levels of profitability for all. He pointed to a report, showing projected profit for dry-stock farming in 2018-2019 will be in the region of $880 per hectare, “… not enough to sustain the level of production that we need just to sustain the level of demand from existing customers,” he thinks.

“We do have to focus on high levels of profitability and we do that firstly from getting more and more from the marketplace and transferring it back down to everyone,” he said.

Taste Pure Nature origin brand
Taste Pure Nature is a great initiative, said the Minister.

Beef + Lamb NZ’s ‘Taste Pure Nature’ brand programme is a great initiative, the Minister said. He had been assured that, “with a bit of encouragement”, all in the sector will buy into the marketing initiative. “And, thereby get some unity in the industry that we haven’t seen for a long time to underpin and promote a strategy and promotion that is about NZ Inc.”

However, there are still too many “laggards” in the sector, and not only those who had failed to adhere to the National Animal Identification and Tracing (NAIT) programme and traceability.

“We are governed by the lowest common denominator because one of these smartphones can send a negative message around the world to undermine all of the good stories that we tell under the ‘Taste Pure Nature’ brand.”

Pointing to an obligation to get out and help each and every farmer, he said, “Now you might say that is impossible, but actually we can’t afford to leave the laggards behind.”

New Zealand has incredible opportunities, O’Connor believes. “But, doing more of the same won’t get us to where we want to go,” he said.

He challenged the primary sector to get on and offer a vision: “Then a strategy that offers a better future, so we can lift that $880/ha to $2,000-$3,000/ha because we’re producing the finest food in the world.”

“But, we can’t compete with each other to realise all of those opportunities, we must collaborate. And, if it comes to legislative blocks to collaboration across the primary sector, then I commit to you that we will intervene just as we did in the dairy industry, just as we did in the kiwifruit industry to ensure that collective efforts deliver a better outcome for all of us,” he warned.

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