NZ lamb riding high after concerted marketing | Wairarapa News | Local News in Wairarapa

People questioning the future of New Zealand's premier grass-based lamb industry should think again, according to Wairarapa Federated Farmers meat and fibre chairman Alan Stuart.
The Mauriceville farmer, who has just returned from a Federated Farmers annual meeting in Invercargill, said that at 2 times the in-market value of competing red and white meats, lamb enjoyed a ''privileged position'' in the retail and hospitality trade.
''Make no mistake, modern lamb marketing has served New Zealand farmers well over the last 10 years or so,'' he said
Present prices showed there was a shortage and the return back to farmers had intensified from 24 per cent of the retail price two year ago to about 45 per cent.
''The sustained, strong pricing puts a stake in the ground for market positioning.''
At the Invercargill meeting calls for industry consolidation were made, with a ''concerted voice to give loyal support to any one exporting company''.
''This has come about because over-capacity makes it easy to shop around for the best price, which produces uncertainty for an exporter wanting to keep the chain full and to fulfil market orders,'' Mr Stuart said.
''It makes sense really but there must still be a degree of competition on the ground to ensure industry and plant efficiency and to provide the right incentive for differentiation in markets and in product.
''That is paramount, otherwise the industry will drift back into the dark ages with no change, no growth and would become a bulk commodity selling service, tantamount to the licensed arrangements of the past.''

At the annual meeting Keith Cooper of Silver Fern Farms (SFF) said change had to be market initiated and commercially driven, otherwise patch control and outsider vested interest would take over, to further a selfish gain at the expense of efficiency and growth overall.
SFF was putting $60 million into a proposal to develop its new, integrated red meat marketing chain which, Mr Stuart said, would help it retain a competitive edge.
''Most other companies have similar plate-to-paddock initiatives, which cement faith in their future operations,'' Mr Stuart said.
Pelt prices were a concern, sitting at $3 when they were $13 20 years ago.
This was mainly due to an international downturn and lobbying by anti-leather groups in some upmarket areas.
Mr Stuart said under-pricing seemed to have died down with the shortage of meat worldwide but was a commercial practice that would happen for various reasons, not just for market share.
It could be used to clear surplus product, to generate sales as in loss leaders, or to clear weak liquidity problems, by all operators from ''monopoly traders to perfect competitors, so this is no great reason to restructure industry''. Mr Stuart said market collaboration, or co-operation, was seen as ''uncompetitive practices'' frowned on by consumers,, ''but it makes sense for the producer who wants to see the price maximised for his product''.
That aside, blatant ''in-market patch grabbing by our own companies has to be avoided at all costs as it destroys the value of the product''.
Inter-company discipline and long-term supply commitment were what had to be achieved.
''The Chinese Emerging Market Meat Consortium failed because not all participants were able to commit to the long-term development costs.''
Mr Stuart said Keith Cooper had suggested at the annual meeting that there were latent opportunities by achieving better average lamb weights and better yearly production spread.
Better meat specifications including taste, fat cover, tenderness and having '' meat in the right places'' would help.
Mr Cooper had joked that a lamb with six hind legs would be ideal.
''As a shearer, I had to strongly disagree,'' Mr Stuart said.
The meeting had been told of the industry's 26 customer bases in Europe, not one had sought any assurances when it came to the status of New Zealand's Emissions Trading Scheme.
''That was interesting, and casts some doubt on our Government's markets-are-demanding-it theory for ETS justification _ but that's another story.''