Big black angus bulls dominated the national cattle stud sales at Beef Expo this week. More than $750,000 changed hands at the sales with almost half of that being paid for angus bulls. The two top sales of $26,000 and $25,000 were angus bulls and, to round the expo off, the breed featured in the steak of origin contest to find the nation’s tastiest beef steaks.

A steak from a limousin-angus heifer raised by sisters Kathy Child and Yvonne Hill, of Whangarei, was judged the overall winner while an angus steak from Chef’s Choice, Whanganui, won the overall best of brand section for retail and wholesale butcheries. Angus also took out the first three places in the best of British breeds section. The four-day expo in Feilding is a shop window for many breeders who will be hoping to lure breeders and commercial farmers to their on- farm sales over the next two months reports The Dom Post.

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A meat industry leader says if NZ processors continue to shun consolidation it is inevitable that a multinational processor will step in reports Rural News. And unless there is consolidation of meat processors here, overseas supermarket chains will continue to take the bulk share of returns. Northland farmer James Parsons points out that a low cost of production is not a competitive advantage “unless you can bank it”.

The Nuffield scholar and M&WNZ director says in the EU supply chain funnel, the power lies with the big supermarkets. In the UK, the big four supermarket chains – Tesco, Asda, Sainsbury’s and Morrisons – have boosted their market shares and collectively hold about 75% of the market. Because of their power in the supply chains, these supermarkets are able to pressure suppliers to discount prices, resulting in lower returns for farmers.

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Sheep and beef producers should pick the companies they supply carefully to avoid becoming casualties of an impending “train crash” in the industry, says the chairman of one of the key players in Rural News. Speaking at a M&WNZ monitor farm meeting in South Canterbury last week, Anzco chairman Graeme Harrison  said average return on shareholders’ funds across the four main companies is “not even the cost of capital”.

Normalised earnings figures – with exceptionals taken out to leave only meat industry activity – for the four largest meat companies over the past five years show combined earnings in 2008-09 were well below the five-year average even though turnover and assets employed increased.Average margin on sales was just 0.7%.“You can all see from these numbers a train crash is coming.”

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The world wants chilled lamb meat but the challenge was to get it to the right markets at the right time, Alliance Group livestock manager Murray Behrent told farmers at a field day last week. While frozen lamb still accounted for 60 to 70 per cent of exports, the aim was to convert that to chilled to maximise returns, he said. “Lamb is a premium product and we want to sell to the millionaires of the world.”

Shelf life had been extended from nine weeks to 11, which meant the meat was on retail shelves for longer, offering more sale opportunities reports The Southland Times. Speaking at M&WNZ’s new Meat the Future field day last week, Mr Behrent said the co-operative knew farmers wanted $100 for a lamb now and were unhappy with returns lower than last year. But if the NZ dollar was the same as last year, farmers would be getting between $112 and $115, because of record prices being achieved in British retail markets.

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Meat companies do “a pretty good job” marketing their product in Europe but are often unfairly criticised for their efforts in what is an extremely sophisticated market, an agriculture academic believes. Lincoln University Professor of Farm Management and Agribusiness Keith Woodford said the EU – including the United Kingdom – took 65 per cent of New Zealand’s lamb by value, paying the best global prices reports The Southland Times.

Companies were getting better returns than for beef, so for lamb to be so well placed in price suggested someone had done something right, Dr Woodford said. “I think they’ve got Europe pretty well sussed but always, of course, they could do a little better.” He told attendees at Meat & Wool NZ’s new Meat the Future field day last week that he expected New Zealand’s meat industry would need restructuring to survive, but did not believe that would lead to a Fonterra-like mega-company. It would probably lead to two large companies – one a co-operative, the other an investor-owner – and maybe some other smaller niche businesses, he said.

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Deer numbers have fallen to levels last seen in 1994 as the sector continues to feel the fallout from record prices earlier this decade.The latest available census, done in 2008, showed a herd of 1.2 million reports The ODT. The kill this year was forecast to fall below 400,000, compared with a peak a few years ago of 750,000. Deer Industry New Zealand (DINZ) chief executive Mark O’Connor attributed the decline to farmers killing capital stock as venison prices fell, a situation from which the industry had yet to recover.

He believed there was a rebalancing occurring in the industry, and those farmers who remained carrying larger numbers of animals would be more productive. DINZ chairman John Scurr, of Wanaka, said the forecast kill was lower than the board would like, but that was a factor of supply and demand which was beyond its control. The sector had been hit by changing land use, and much of its traditional finishing country was now being used for dairying. That meant deer herds were being pushed into the high country foothills. This was despite deer farming being financially competitive with lamb finishing and wool and dairy grazing, he said.

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Waiting three to five years for the cash will be too long for many struggling woolgrowers, says Federated Farmers Meat and Fibre chairman Bruce Wills, commenting on Wool Partners International’s recent roadshow. Farmers heard from WPI’s US and European marketing managers on efforts to grow demand for strong wools and the direction of international markets reports Rural News.

Wills says he “supports the WPI concept and many other farmers left the meetings with more confidence and optimism. But appalling wool prices now are forcing many growers towards deciding to move out,” he says. “Farmers were saying ‘It sounds good, but how long to the money?’ Eyes were rolling at the answer ‘three-five years’. Many can’t wait that long despite their goodwill towards WPI chief executive Iain Abercrombie and his team.“We understand you can’t create a brand overnight but some growers are desperate… three-five years seems half a lifetime. And if prices don’t pick up soon, when WPI says ‘Now where’s your wool?’ they’ll hear only… silence.”

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Signs of life have been seen in the flat rural real estate sector in the last week with $11 million worth of property changing hands in two hours. The auctions in Tauranga involved three farms, in a turnaround from past months where rural sales in the Bay of Plenty had been sparse, real estate firm Bayleys said. Farm prices have dropped 40 per cent and sales and sales volumes 75 per cent during the last two years as the withdrawal of easy bank lending dried up farmers’ appetites for capital gains reports The NZ Herald.

Last week’s sales included a 112 hectare dairy farm near Whakatane which sold for $5.1 million, a 170 hectare drystock farm at Waimana in the eastern Bay of Plenty which sold for $2.4 million and an 82 hectare dairy farm near Whakatane which sold for $3.85 million. Bayleys marketing agent Rhys Mischefski said the sales were clocked up in the space of two hours and were a surprise given the “sparse year for rural sales in the Bay of Plenty”.

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Saudi families hungry for NZ -style gourmet burgers have been so enthusiastic in their turnouts that they have to wait in their cars until a security guard advises they can enter, says the NZ BurgerFuel franchise’s Kiwi founder and business development manager Chris Mason.  He said the listed company’s 150-seat, 300 square metre fast food restaurant at Damman, failed to factor in the size of a typical Saudi family group, which can be up to 15 reports Business Day.

“One Thursday night, which is like our Saturday night, we did the equivalent of the average NZ store’s weekly turnover,” Mr Mason said. Friday in Saudi Arabia is the religious equivalent of NZ’s Sunday. In accordance with Saudi culture, the outlet has a separate entrance and dining area for male diners without family members.  A 280sqm outlet is about to open in the United Arab Emirates tourist resort Dubai. Mr Mason said more than 20 more outlets were planned in Saudi Arabia.

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Silver Fern Farms has made a half-year loss of $14.3 million before tax from revenue affected by fewer lambs to kill and a high dollar, but believes it will make a profit by the year’s end reports Stuff. Revenue for NZ’s largest meat processor fell to $784.3m in its interim result for the six months ending February, $217m less than last year’s first half. However, the first half of the year is usually the worst trading performer as was the case in the 2008/09 season when SFF rebounded from a $16.5m loss to post a second-half $21m profit for a better year-long result.

After this season’s poor start its meat plants were running at full capacity in March and April and the co-operative has already recouped the losses of the first six months and is now in a profit position. Trading was complicated initially by farmers holding on to livestock from a good growing season in combination with low seasonal flows to stunt meat processing, with SFF having to wear the cost of plants performing under capacity. The co-operative has taken some comfort from retaining its market share as the meat industry adjusts to the national kill dropping by 1.5m lambs.

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