Time to stand up and be counted for our industries

Speech by Jeanette Maxwell, Federated Farmers Meat & Fibre chairperson, to Federated Farmers 2012 National Conference in Auckland

Welcome to the Meat and Fibre AGM for 2012. It is pleasing to see new faces within our ranks and I hope you will enjoy the next couple of days.

Since we last met in November, which now seems a life time ago, another season of our traditional ups and down took place. Unlike our usual trends, these were far more pronounced in our sector. We have been fortunate to have had two reasonable seasons in a row, something which has not happened for a long time. While I understand not all of the country was flourishing, many regions were and with a kind, but cooler autumn,  areas which experienced troubles can now put some worries to rest.

As seems to be the case for the sheep and beef industry, there are still many ideas and concepts being discussed outside the farm gate to improve our incomes, strength, unity and industry participation. This has been very prevalent in the last 12 to 18 months especially, with some reports and concepts being more hopeful than others.

In March this year, the Shearing Contractors Association launched its Shear NZ programme and some contractors have signed up to this. This initiative is designed to lift standards with the shearing industry and to help align clip preparation with how the product will be sold.

While a number of these wool industry initiatives gained a certain level of support from farmers, none have gained the critical mass needed to progress and get any one project off the ground.  New Zealand wool exporters are starting an on-shore campaign to raise awareness of the unique qualities of this fibre, as local sales of woollen carpets have declined dramatically in recent years.

The Wool Unity Group has not met for a year now, but there are still email exchanges and this group is starting a strategy plan with KPMG. The Campaign for Wool, Prince Charles’ wool initiative, is still being supported by some members of the Wool Unity Group and funding is still an issue going forward. Wool Services International is still in limbo in terms of its share-holders being in receivership. On a brighter note Summit Wool Spinners has been brought by Wool Equities Ltd.

Later today, Mark Shadbolt will address this conference with an update on Wools of NZ.
For on shore wool sales the initial season opened well, in the spring with significant pricing increase on the 2010 spring, for some of the early sellers pricing was well over $5 per kg, while at the same time the global wool price sat at just over $2 per kg. So in recent months, coinciding with the weakening of the overall commodities market, prices are now well down on those early levels as part of the pricing correction. Currently wool pricing for the next season looks likely to be $3.20 to $3.30 per kg and the global price still looks to be around the $2 per kg mark.

Who knows if the crystal ball will hold true? Marking predictions in this market is like playing roulette, it’s anyone’s game.

The Red Meat Sector Strategy was launched in May 2011. The three key areas of focus for the strategy are:

1. Coordinated in-market behaviour
2. Efficient procurement
3. Sector best practice.

These three points are links to Informed Aligned Behaviour Change.

While I know this document does not tell us the answers, it does identify areas for change. It does require everyone to make changes to what they do and tells us how to do it. It also requires behavioural changes for each part of the sector as well.  We cannot continually blame each other and make it someone else’s problem.

I know as the primary producers of the products, we often feel it is a futile battle to enact change, but we are part of the change needed for this to be a thriving sector of New Zealand agriculture.

Beef and Lamb NZ are currently putting together a Primary Growth Partnership (PGP) programme to help assist with driving change and delivering better returns to farmers.

As sheep and beef farmers we should be ready to take on board the new science and new ideas, after all we have made huge production gains in the last few decades. In lamb production, despite a decrease in the lamb crop from 33 million in the 2006-07 season to just 25.2 million in 2010-11 average carcase weights have increased from 16.90 kgs in 2006-07 to 18.41 in 2011-12. Likewise, the seasonal average value of beef has steadily increased from 350 cents per kilo in the 2007-08 season to 420 cents this past season. I am sure we can take this to the next level.

The goal of Federated Farmers’ T150 campaign is linked to the continual sustainability of sheep and beef farming. Our goal for a mid-season lamb being worth $150 must be achievable year on year and wool has to be a part of the equation.

Pricing for lamb has tracked back from last season’s highs averaging $117 for an average mid season lamb, but lamb continued to see reasonable pricing this season. It is important we do not lose momentum on this campaign as two reasonable seasons does not mean the long term battle has been won.  We need to be able to achieve good prices which will ensure our farms are financially viable, year on year.

A couple of weeks ago the Ministry for Primary Industries released its Situation and Outlook for Primary Industries for 2012. The MPI is optimistic about medium-term prospects, but it warns that export revenue will fall over the coming year. This will impact on farm revenues and so like many times before, sheep and beef farmers should be looking to a more conservative budget as incomes will come under pressure in the 2012/2013 year.

As we all know commodity prices have come off their highs and the exchange rate remains stubbornly high.  It would also be a very brave person to expect a repeat of last season’s favourable weather conditions.

The medium-term outlook, is brighter with strong growth likely to continue from China, India and other major economies in Asia and Africa.  New Zealand sheep and beef farmers are well positioned because as these nations continue to grow and develop, their populations will increasingly demand a higher protein diet.

It has been interesting to note that many sheep and beef farmers have been paying down debt and doing some of those long awaited repairs and maintenance jobs around the farm.

While this is great it will also be hoped that farmers remember to take a good holiday as well.
We often forget we need to be refreshed also. As part of any health and safety plan, health and wellbeing are part of the equation in accident prevention.

This is alongside wearing helmets while riding on your quad bike and installing reversing alarms as well. As many of you will be aware, the Department of Labour has been doing inspections on farms and farmers and staff not wearing helmets incurred instant fines of $200. It is my personal view that we need to remember to have Health and Safety Plans on our farms and remember to check and update these documents on regular bases. It is often one of those, “I will get round-to-it things, but really we need to get them done sooner rather than later.

A newer area for attention for sheep and beef farmers is the environment. With this in mind we will have Ian McKenzie and Dr Paul Le Miere addressing this conference this afternoon.
At present, environmental demands are a fast moving feast, with the goal posts changing weekly.

While I am not saying we have not done anything in the past, because in-fact many sheep and beef farmers have achieved a lot in this space, we are now starting to get more attention.

This is a very important issue and it is clear that Meat & Fibre must be engaged in the debate and actively involved at a regional level. There is no one-size-fits all solution to the outcomes required around the environment, so we need to look at what is the best fit for each region.

The more proactive we are now about being part of the solution, the better the outcome will be for everyone in the long run.

We need more willing representatives to stand up and take part in finding solutions to this issue.

So going forward, some key areas for focus are:

Collaboration:
We need to work together with our industry partners. This is everyone who is part of your farming enterprise. You can’t be successful on you own and while it is your farm, you need a good team around you to make things happen.

Communication:
I am not just talking about the odd phone call or the never ending round of emails. Proper communication is about engaging with friends, businesses, taking part in local activities and going to education days. It is not a matter of waiting for information to come to you, but seeking information for yourself.

When there are local issues, get a group together and work on them as a team. You are far more likely to want to engage and find others who want to this way. Let’s face it, we should not keep relying on the same old people. Within the Federation there is a great team of staff and fellow farmers to work with.

Leadership:
I know no one wants to be the “Tall Poppy”. For some it can be a lonely place, but being a leader is about bringing people with you and doing want you can to engage people. The thing to remember about being a leader is that you are human and with that, we make mistakes.

With the Federation we are lucky to have Leadership Courses available to give members training and the opportunity to learn skills with a great bunch of likeminded people.
If we want to enact change in the sheep and beef industry, we need to show leadership and be part of the change going forward into a prosperous future.

Sitting behind the fence or gate won’t do it; waiting for some else to make the first movement won’t do it; burying your head in the sand won’t do it and saying it can’t be done won’t do it.

We need to stand up, be prepared to walk tall, take our friends and family with us.
We need to show collaboration and communicate with others. I know, like you, the hurdles are high, but they are not insurmountable. This is not the job of one individual; it is about the working together.

In doing this we can be part of the change and drive forward for a better brighter sheep and beef industry.