Kiwis focus on customers to ease constant pressure
By John Burns South-west correspondent
THE future for livestock farmers will be pressure and more pressure, requiring constant monitoring and modifying to meet changing market requirements, believes Meat New Zealands general manager Europe, Tim Ritchie.
He told a meeting at the Duchy College, Cornwall, that todays shoppers could buy from anywhere in the world, especially on-line, so smart livestock farmers would aim to satisfy consumers needs by adapting quickly in response to changing eating habits and lifestyles.
That was what New Zealand farmers and their meat plants did when virtually all their subsidies were removed overnight.
"Whatever you do, keep it consumer-focussed. Identify and exploit your advantages and aim to provide consistent quality so consumers can repeat-buy with confidence."
He told the meeting that the NZ meat industry had rapidly changed from being production-driven, with the main concern being providing enough slaughtering capacity, to being market-led.
The first New Zealand frozen lamb carcasses were exported to UK in 1882, and 100 years later 82% of exports were still in carcass form. But today carcasses were less than 10% of total lamb exports. By seeking new markets lamb income had been improved.
"We are not seeking to increase market volume share in Europe because we are limited by quota, but we are adding value and increasing total returns."
Market research in the US showed consumers felt lamb was difficult to cook and they did not like its smell. So Meat NZ promoted barbecue lamb – 75% of US households have a barbecue – and provided them with consistent suitable product. New Zealand now had 30% of the US lamb market. The US sheep flock was over 50m at one point but was now down to 7m, and was producing meat of variable quality.
In Europe there was a growing demand for chilled lamb, he said.
Mr Ritchie said the six-week voyage from New Zealand meant their chilled lamb had ample time to mature and so its eating quality was consistently good.
Responding to questions, he insisted New Zealand was conscious of animal welfare issues and last year had passed an animal welfare act based on the best in the world. The reason why New Zealand did not want welfare issues included in WTO rules was fear that some countries would use welfare differences as an excuse to give subsidies to farmers.
Just four meat plants – owned wholly or mainly by farmers – process more than 80% of Kiwi livestock. They operate entirely commercially and work closely with farmers and customers, often having forward contracts with agreed prices, he said. Traceability to farm of origin was also provided.
Mr Ritchie could not see why EU farmers objected to NZ lamb imports when they were timed to fit with low domestic production and were priced at the high end. "We are not trying to buy sales volume by price-cutting."
In NZ, cull ewes made $NZ25-30 (£7-8.30), and were mainly made into sausages and similar products. A 16.5kg lamb made about $NZ50 (about £14), he said. Favourable exchange rates had led to the current optimistic outlook among NZ farmers, even though typical accounts showed a return of only 2% on capital, while interest rates were 6-7%.
Meat NZ also helped farmers by funding research on ways to improve farm profits and increase efficiency beyond the farm gate. Meat NZ was funded by a compulsory levy at slaughter of 40 cents/lamb (11p) and $NZ3.40/beast (94p). *
• Consumer focussed.
• Identity and exploit advantages.
• Provide consistent quality.