Silver Fern Farms (SFF) is in no-man’s land on its road to plate to pasture.

“We’ve validated the strategy and we are making good gains,” chief executive Keith Cooper told about 100 shareholders who packed into the company’s AGM in Gore last week.

But there is still a long way to go to implement the integrated supply chain strategy, and commitment and tenacity are needed to complete the transition from the historic procurement and processing focussed model, he says.

“We want to make our money by being smart, nimble and highly competitive… We are in no-man’s land right now.”

Cooper says it is not the cooperative’s aim to be the biggest processor and it is “unfortunate” it is.

As such, it has had no choice but to engage in the current lamb procurement battle, not just to fill processing plants but to meet customers’ orders for Easter.

“I don’t think I can remember a year when we were not killing at 100% in January. The whole industry is chasing stock.”

Marketing partnerships such as the Angus McDonalds contract, or M&S supply chain, are the cooperative’s future and new marketing personnel have been appointed as it “transitions from being a sales business”.

SFF’s European and UK chilled lamb market share is up 5% and 14% respectively already, and on the supply side average lamb weight processed is up 9%, from 15.8kg to 17.2kg.

Investment in R&D is also starting to deliver with advances such as X-ray carcase scanning (Finnegan, Pareora and Takapau) and ovine automation coming online, though glitches have delayed scan results going on kill sheets.

Meanwhile, project Optimal – comparing all parts of the business to global benchmarks – is identifying “substantial cost savings”.

For example, a switch from polystyrene shipping container packing to special cardboard is “a $250,000/year net gain to the business”.

Cooper touched on the financial position while chairman Eoin Garden delivered the detail in his review of the year, repeating key figures from the annual report and fielding fire from the floor about the zero rebate.

“The message here today is we’ve got to take the shareholders with us and if we do that we will come out with a better industry,” said Garden.

“The real challenge this year may not be currency, it may not be the market place: I suggest it’s our attitude in how we deal with this company.

“This business was uniquely debt funded and not by its shareholders,” pointed out Garden.

He also reminded shareholders they’d had, on average, a $12.9 million/year rebate for the previous nine months.

But the rebate decision undermined plate to pasture principles at the outset, one disgruntled shareholder said.

Others complained about schedule differentials, uncooperative behaviour, the low share price, and last September’s restructure.

“The thing that really concerns me is was we had one vote for several issues,” said Alex de Boer, a sheep and beef farmer from Owaka, southeast Otago.

David Shaw, Clinton, asked: “Why does the cooperative continue to act so uncooperatively?” suggesting the restructure has set it on a road to outside ownership.

Hugh Gardyne described the restructure as “the steal of the century”.

“Shareholders are now voting with their stock and supplying other processors, and I am one of them.”