Another farmer at the forefront of calls to reform the meat industry in recent years has quit the sector.


Just weeks after Meat Industry Action Group (MIAG) chairman John Gregan’s clearing sale of sheep to go dairy (Rural News, July 6), his predecessor at the head of the ginger group, Keith Milne, Southland, has also sold his last ewes.


In doing so, Milne says he’s encountered firsthand the procurement problems MIAG sought to highlight and eliminate.


“The [third parties] in the supply chain are still there, and the companies are still using them,” he told Rural News.


He had hoped all his in-lamb ewe lambs would be sold for breeding stock, but only half did, the balance going for slaughter through the same agent.


As an Alliance shareholder, Milne says he’d approached the company for a slaughter price and $97/head was indicated, subject to grade. The agent paid $111, based on a dealer’s bid for slaughter stock to supply Alliance.


With crutching, bellying and cartage costs to come off, the agent’s price was “somewhere between $20 and $25/head better”. What’s more, the dealer is likely to have been paid a procurement bonus, he believes.


“How much money is being wasted like this? It is the same old story. This comes at a very high cost in dollar-terms to the company and very high cost in terms of undermining loyalty to the cooperative.”


Alliance chief executive Grant Cuff says Milne’s experience was a timing issue, the $97 price having been given around Queen’s Birthday weekend (June 5-7) with schedules climbing substantially since.


“He’s comparing apples with pears.”


What’s more, of all the meat companies, Alliance’s use of third-party procurement, be that stock firm or dealer, is the lowest.


“Yes, we use dealers but it is less than 10%. They provide us with a service at certain times of year that we can’t do as easily in other ways. They add value to our shareholders’ business, not detract from it.”


Whatever the cause, Milne says the experience confirmed to him he has made the right decision to lease his 170ha farm to a dairy farmer on a profit-share basis.


That’s despite some solid production and financial figures over the years from the intensively managed Romney-Texel composite flock.
“This is about taking the business to the next level.”


Attempts to do that by lambing earlier and taking on a second crop of lambs as stores on a finishing scheme proved impossible, he adds.


“We tried for three years to get lambs on a finishing plan… but they just couldn’t source the lambs; they couldn’t beat the dealers on price.”
Milne says despite his decision, there are many positives for those left in the meat sector.
“And at least now everyone accepts the need for change.”