Do you think the Red Meat Sector has a good future?

Chairman, Malcolm Bailey: NZ Farmer, December 2014

Are you making enough money? Are you performing in the top 20% of red meat farmers? Are you enjoying running your farm? Are you making a better return on your investment than the average dairy farmer? Do you think the Red Meat sector has a good future?

If you answered YES to all those questions, you don't need to read any further - but you hopefully you will want to.

The Red Meat Profit Partnership has been established to help you improve your profitability and productivity on your farm. How? Well, not by telling you to work harder for longer – many of you work too hard already.

We want to help you understand the changes (often small) that you can make in your farming operation that can have a big impact on your bottom line profitability. We know that the return on investment of the best performing sheep and beef farms is comparable to other land uses.

We are researching what the highest performing red meat farmers do and we will share these insights with you. We know already that the top performers collect meaningful data about their animal and farm performance and use this to fine tune their operation.

Providing you with easy to use ways of collecting data and analysing data is one of the key elements of the Red Meat Profit Partnership work programme. This means at farm level you can use the information to make better decisions, check how you stack up against others, and efficiently transfer data to and from organisations you deal with.

We also know that the top performing farmers put a high value on their leisure / family time and plan for it. Good planning is a learned skill. The extension work within the Red Meat Profit Partnership is designed to give you the opportunity to learn from others and hone your skills. And enjoy yourself while you are doing it.

So why are most of the meat companies, ANZ, Rabobank, Beef + Lamb New Zealand, and the Government (NZ taxpayers) all working together in the Red Meat Profit Partnership to help farmers lift productivity and profitability? The answer is simple. If you can all improve your farm bottom line by a little bit year after year, it means a lot more through-put for meat processors, more secure bank clients, and it adds up to a hell of a lot for New Zealand. The potential here is an estimated $284 million a year in pre-tax on-farm profit by 2025. And yes, we all think the Red Meat sector has a great future.

The Red Meat Profit Partnership is also working to create more interest in sheep and beef farming as an attractive career. We need more people coming into the sector and we want good people. Good people get good results.

We're also keen to further develop the New Zealand red meat sector story for important international beef and sheep meat markets. Consumers in these markets need to know that our products are the best in the world and that our animals are raised in a natural and safe environment by farmers who understand how to care for them and their land and leave our resources in better shape for future generations. This story will give clear messages to our markets about the high quality, nutritious red meat products that New Zealand sheep and beef farmers produce.

The Red Meat Profit Partnership is also researching the pathway between farms and meat processors to see if the sector can do things more efficiently. Many think that there are huge gains to be made here. Maybe – but we are not so sure. If there was an easy solution and obvious gains we think they would have been found a long time ago. We don't have any answers yet – but we will share the results when we get them.

While there are improvements that can be made from farm gate to market, it seems that most of the opportunity to make more money for farmers sits inside the farm gate. There are things you can change for your financial benefit.

The Red Meat Profit Partnership will help develop the knowledge, systems and tools for you to adopt if you want to. There is no silver bullet and no outsider is going to make your farm more profitable. Only you can do that.

But let's not underestimate how significantly the whole red meat sector can improve if all of us lift our farm performance by a little bit.

Footnote:

Malcolm Bailey operates a beef cattle and maize growing farm near Feilding. He has investments in dairy farms, industrial property and manufacturing. He is a director of Fonterra and Westpac NZ.