Meat ProspectsMonday, Jun 11, 2001
Improving prospects for meat producers is a strong message from the Richmond chairman. Richmond makes
the strong point that the industry is poised to benefit from changes made at every point in the
value chain through innovation adding value, not cost from the farm to the market.
Using the example of lamb productivity having risen 3.5 percent per year for the past 10 years there
must be some sort of warning here for the big investing dairy converters.
The euphoria over dairy’s apparent dominance of pastoral production may be blinding investors
to the high redundancy cost of large scale dairying should the profitability projections not be realized
and other forms of land use become more popular.
It is clear that the meat industry sees an upside arising from the application of technology and innovation
that may, if as has been reportedly stated by a dairy co executive that the prospects for
declining dairy prices is very high.
A major part of the hype on the dairy industry is encapsulated by some dairy leaders claiming that on
a return on investment basis South Island developed dairy landwill be worth in excess of $30,000
Dairying currently has some characteristics of the Air New Zealand’s Ansett Air purchase. Ok if
all things are equal but a white elephant if its not.
Recipes for meat production, classes of breeding stock, livestock trading and grazing policies and alternate
land uses have battered sheep and beef farmers over recent years.
But it seems there is reason to have confidence that there is a future in both sheep meats and beef
without the vast input of capital required to satisfy the setup costs of changed land use.