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Meat Industry Games

Greetings Readers

Richmond Meat's stock exchange listing has shown up some interesting new intentions from this major NZ meat player.

The shift from seeing meat as animals to seeing meat as food is a major change in the firmly entrenched old psychology of the meat industry.

Producers should hope that the change is for real and that it is not some window dressing puffery to encourage naïve investors to put money on a beast with the same old spots.

The comparison with AFFCO will inevitably be made. A company, which had a similar farmer owned history. Six or seven years of AFFCO listing have not shown any growth in share value and insignificant returns.

Where does the problem lie with the meat industry operators? Do they buy badly? Do they process inefficiently? Or do the market and sell abominably? Probably a little of all three. But mostly they are diverted from their success by short-term visions and petty games seemingly modeled on the activities of the robber barons of history

It is notable that the dairy industry is beavering away at this same time putting together an efficient production and marketing structure funded by their producer shareholders for the benefit of their producer shareholders. A structure that is condemned as being anticompetitive and therefore inefficient.

But does the example of the meat industry structure not sound a warning about competitive structures being far from ideal also?

Dairy producers need only look to the meat industry example to know that fragmentation and completion amongst producers and processors ensures that the consumer is the final beneficiary whether the want it or not.. Inevitably they will receive access to cheap products, of low quality, poorly packaged and in an unwanted form.

And that in the meat industries past this has been called competitive marketing.

Good farming




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