Good afternoon everyone
I count it a real honour to lead your organisation in an industry I’m proud to represent.
In our discussion with you as farmers there are four themes that constantly come to the fore. They are:
- Farmer profitability
- Confidence in the future of farming
- A want for greater pride in the industry
- The desire to be able to get on and farm rather than be constrained by compliance and administration.
I want to briefly address these issues and what Beef + Lamb NZ is doing about them on your behalf.
Farmers tell me that they feel under the pump from external critics, whether that’s around the environment, animal welfare, our greenhouse gas emissions, or questions about meat consumption and health. Having been the pin-up villain for the pork industry for six years – I can emphathise with you – I know how it feels.
However I want to say that our industry has a good reason to be tremendously proud of what it has achieved. For those of you old enough to remember, cast your mind back to 1990. You had just become the most deregulated industry in the world, you were facing interest rates of 28% and a depressed international carcase market predominantly supplying the UK. From there you pulled off the biggest turnaround of any industry in NZ and maybe the world agriculture.
You’ve achieved dramatic increases in productivity:
- Average Lambing percentage has gone from 100% to 125%
- Lamb weight sold per ewe wintered has increased by 93%
- You’ve maintained carcase weight sold with half the number of sheep
- You’ve achieved it with 23% less land – in rough terms 1 million ha has been retired and 1 million ha converted to other farming
- As Dave noted during that time you’ve also reduced your green house gas emissions by 19%.
From a market and product perspective:
- The modern carcase is dissected into 42 different cuts and numerous by-products which are exported to over 100 countries
- Today, 18% is chilled cuts and boneless product and frozen carcases make up only 5% of our trade.
This has been a great combined effort from farmers, processors and exporters. There is no other NZ industry that has achieved this transformation, so take pride in it.
However I am the first to admit for the average farmer profitability is a significant issue. As James has noted, profitability is a three legged stool. Kgs of product produced, $per kg/product sold minus cost of production. He’s rightly noted that the price has been rising in real terms.
However it appears that costs have been rising faster - the result is too little margin. A major factor in this you’ve talked about is the cost of compliance.
Dave has given you a good overview of the environmental issues we're facing and our approach. However I want to emphasise more the work we're doing at a national policy level.
On the water issue there is no doubt that the government's approach is a mixture of pragmatism and politics. They understand the importance of our sector but they are under significant political pressure too. Our consistent message is that as we change, consider that the environment is just one leg of a four legged stool. The other three legs being social, economic and cultural considerations, therefore change needs to balance these. It's good to hear today that the prime minister was listening.
Another consistent message we have been given is that farmers have the same if not a more intense appreciation of the environment than the rest of society, and provided with the right information, tools and support, farmers will make the changes needed. In both the green house gas and water quality issues, we have worked with other industries and Fed Farmers to convince government against the need to regulate but instead give industry a target and let farmers and their support network work out what changes to make.
On water we now have national industry group working with MPI, MFE, and Regional Councils to develop principles that can be applied nationally and locally to develop priorities for your catchment and a change plan with reasonable time lines. Those Canterbury locals here might be pleased to know that the principles that you developed, the Canterbury Industry-agreed Good Management Practices for water quality, are being considered for national adoption.
The same approach is being taken with Green House Gases - once again we are working with government to develop a plan whereby industry can develop its own approach to meeting targets, rather than be regulated. Our ongoing aim is to work with government at a strategy level before policy is developed and achieve self-determination for our industry.
A second area where we’ve put in considerable effort is Health and Safety. We’ve worked with Worksafe and said let us work with farmers to improve safety rather than hard wiring regulation and compliance activities. The result is that Worksafe has supported us to the tune of $240,000 over the last two years to develop, deliver and follow-up health and safety workshops.
Over 3000 of you attended our workshops last year and your feedback was overwhelmingly supportive; Worksafe and the Minister are delighted with industry’s response. Recently we went back to a subsection of farmers to ask them what value they got from the workshops. One focus group from the Hawkes Bay sits in my mind. The farmers commented that they had probably got back more than their whole years Beef + Lamb NZ levy’s paid through the money saved by that single workshop.
I want to comment now on confidence in the future – another key outcome you want from B+LNZ activities. I believe that the Red Meat Story that Nick and Wendy have outlined today will be a tremendous tool in our toolbox for driving up the value of our product. As farmers and industry I think we have a compelling story to tell. Not only will it underpin companies' ability to service increasingly higher value customers overseas and locally but it will form the basis for our dialogue with urban communities and government who are challenging our social license to farm.
We together will build a great story but it is in the implementation and use that will deliver returns. My vision is this:
- 4.6 million NZ residents understanding, being proud of and supporting our story and industry
- 2.4 million of those Kiwis travel overseas annually – we need them to be beef and lambassadors
- Those travellers overseas include the MPI’s, the MFAT’s, the MBIE’s and the NZTE’s - we need government to be carrying the story with passion and confidence
- We have more than 1 million proud NZers living overseas - we need to find them and infuse them with the story
- We have 22,000 people, including you, employed in our sheep and beef farming sector. Another 25,000 employed in our meat processing and exporting sector – imagine the power of all of these voices telling their part of the story with enthusiasm
- Last but not least we had 3.4 million people visit our shores in 2016; 80% of them as tourists. Imagine the impact of each one going home with a compelling story and eating experience of NZ beef and lamb.
Sounds aspirational – indeed it is, but frankly it’s a necessity. We have a great story, everybody loves a great story, we owe it to our industry and our country’s future to tell that story. By working together I believe we’ll be able to grow the profitability and confidence of our sector.
Before I come to profitability, one other area you’ve emphasised is that you want us to play a role in attracting more capable people to our industry. I want to say that we are investing heavily in this area, including through the Red Meat Profit Partnership – let me give you a snapshot. Last year we had:
- 3000 students participate in our Get Ahead and Teenag programmes – introducing them to the opportunities in farming
- We had 700 primary ITO trainees
- 500 women have been supported through Agriwomens development trust workshops
- We had 150 students at St Pauls Collegiate trialing a new agriculture curriculum which is now being adopted by 66 secondary schools nationwide
- We’ve supported 40 people through the Kellogs leadership programme
- 26 through tertiary scholarships
- 14 people have been through our farmer council development programme
- 5 Nuffield scholarships
- 2 young farmers each through International Beef Alliance, trT Lamb, and Young Shepherds scholarships
- Total 4.441 people were better equipped to be part of our industry’s confident future.
Our feedback tells us that you aren’t aware of a lot of these activities so expect to hear more from us on these over the next year.
Lastly I want to come back to profitability. As you’ve noted farmer profitability isn’t good enough. Last year we ran 434 tech transfer events and had 20,700 farmers attend them. We have 125 project farms and have almost reached 100,000 hits on our website. We are constantly upping our engagement with farmers and farmers are responding but there is an absolute desire to ensure that what we do is not just a “bums on seats success” but rather “the numbers are on your bottom line” as farmers.
Through the Red Meat Profit Partnership and our own strategic review, we are developing a sector wide R&D plan and we are reassessing how we do our extension – we cannot just lift the stocking rate of activities on an already full calendar, we need to do something different and something that we are confident will make a bigger difference to your bottom line. We are focused on working more with other partners in the industry to make our resources and messages go further while still retaining the Beef + Lamb NZ independence that farmers richly value.
You can be confident we’ll also continue to have your backs on those regulatory and compliance issues that add cost, tie up your time and make it hard for you to drive productivity and profitability.
- We do have an industry to be proud of
- We do have your back on the big issues
- I’m confident that we can help you to be confident about the future with great people and a great story
- Lastly we are determined to do better in ensuring our R&D and Extension activities do deliver tangible benefits to your bottom line.
I look forward to working with you over the next year to deliver on those promises.