Tradable slaughter rights – the Pappas, Carter, Evans and Koop proposal

In recent weeks there have been suggestions that tradable slaughter rights can provide a path forward for the New Zealand sheep meat industry. Mike Petersen from NZ Beef and Lamb has given the notion a ‘leg up’ with his personal endorsement, and apparently at least some of the processors are keen on this idea.

Combining the Two Meat Co-operatives: Alliance and Silver Fern Farms

There is widespread agreement that some form of consolidation in the New Zealand red meat industry is necessary. There is also widespread acceptance that there is a problem with over-capacity in the sheep-meat part of the industry, although this is probably not the case for beef. The challenge is to find pathways to solutions that solve more solutions than they create.

Sheep Meat Opportunities in China

Growth in sheep meat sales from New Zealand to China has been phenomenal. China is now New Zealand’s largest sheep meat destination by volume, and second largest after the UK by value. There is a chance that within the next 12 months it could surpass the UK in value. [Update of 17 May: In the four weeks since I wrote this post, statistics for the first quarter of 2013 show that China has indeed now become Number 1 by value as well as volume.]

The trade started off as mainly lamb and mutton flaps. These are the fatty off-cuts which in New Zealand we have always regarded as being very low quality, but which are highly regarded in traditional Chinese hotpot cuisine. Now the trade is moving up to higher priced cuts, as all the flaps are already allocated, albeit at increasing prices.

Meat Industry Restructuring

Yesterday (18 April 2013) I was a guest speaker at a meeting called by the Meat Industry Excellence Group (MIE) and attended by 300 - 350 Canterbury sheep farmers. This is one of a series of meetings MIE is running throughout the country. The purpose is to get a mandate for industry change within the troubled sheep industry.

The Veil Comes Down on NZFSU

New Zealand Farming Systems Uruguay (NZFSU) started out in 2006 as a grand strategy by  PGG Wrightson (PGGW) to apply New Zealand farming expertise to dairying in Uruguay.  The idea was that land could be bought cheaply and that the application of irrigation, fertiliser and New Zealand grassland farming techniques would lead to healthy entrepreneurial profits.

The initial results were exciting.

A2 Corporation joins the big boys

Despite my long-held views about beta-casein, and the importance of converting dairy herds to produce beta-casein that is of the A2-type, I typically avoid commenting on the commerce of A2 milk. My hesitation stems from concern that people might incorrectly think that my commentary could be influenced by commercially sensitive information that is not in the public arena. 

Despite that reticence, recent announcements from A2 Corporation  are sufficiently momentous that I have decided to contribute some words on the commercial developments. 

Fonterra Shares Soar High

Friday 30 November 2012 was a historic day for Fonterra. For the first time, non farmers could buy rights to Fonterra dividends and capital gain (but not voting rights on the shares themselves) through the Fonterra Shareholder Fund (FSF). Some 95 million shares were issued at $5.50. But within a few hours, more than 25% of these had traded at a price premium well over 20%, and the market closed with the shares priced at $6.85.

Fonterra will no doubt be very pleased with the successful launch of the FSF, as will all of those who managed to obtain shares at the issue price of $5.50. But the full implications of the new world at Fonterra will take some time to digest.