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Brief Bites, 31 July

In this edition:

  • Wet weather, flooding and snow
  • Prioritising our people and the communities we support
  • Loyalty payments
  • Associate Director appointment
  • Smithfield vegetable garden provides community resource
  • Know Your Numbers Workshops 
  • MyOSPRI eASD system
  • Global market update
 

Wet weather and flooding

Our thoughts are with the many farmers and communities that continue to be affected by wet weather, flooding and snow.

As a result of flooding in North Otago, the turbidity levels of water supplied to our Pukeuri plant have been so high, we have not been able to process livestock and have ceased processing until the situation improves. At this stage, we expect processing to resume at Pukeuri early this week.

In the meantime, we will use our network capacity to support farmers. We have been diverting livestock to Smithfield and brought on additional capacity at Mataura to process beef. Inevitably, the disruption will cause some inconvenience for farmers, but we will operate the co-operative to minimise the impact and meet your processing needs. Please speak with your livestock representative if you have any questions. Read more here.

The Rural Support Trust and Beef + Lamb New Zealand also have information and advice available.
 

Prioritising our people and the communities we support

This week, more than 70 of our people from across the country gathered in Oamaru for a busy and productive Annual Livestock Conference.

Our people are our future. We are committed to investing in the livestock team, developing individuals and teams, and supporting a high-performance culture so that we remain an employer of choice, and continue to deliver value to our farmer shareholders.

The packed agenda included recognising the efforts of the livestock team this year and the work they have done to support farmers. We discussed the company vision, strategy and priorities for the co-operative, held a session on forecasting and how it ensures we have capacity turned on when famers want it, the roll out of new processes and technologies and how we will work collaboratively and deliver value to our farmer shareholders.

The mental health and wellness of our people, and of the rural communities we support, is something we take incredibly seriously. This year, we were joined at the conference by rural mental health advocate Matt Chisholm. Matt, who grew up in Oamaru, shared his own mental health journey, reminding others that it “is okay to not be okay” and encouraging us to think about what we can do to support ourselves and our shareholders to stay ‘mentally fit’.

It was exciting to see how positive our livestock team were about the season we are now getting close to completing and the opportunities for the new year.
 

Loyalty payments

As New Zealand’s only 100 per cent farmer-owned red meat co-operative, we are in business for you. We return every cent we can to you, or re-invest it back into your co-operative.

We have recently distributed more than $5.1 million in loyalty payments to Platinum and Gold suppliers who send 100 per cent of their livestock to the company.

Under the Alliance loyalty programme, platinum and gold status suppliers are paid an additional 10 cents per kilogram for each lamb, six cents/kg for a sheep, 8.5 cents/kg for cattle and 10 cents/kg for deer supplied. The latest quarterly payments cover the period April-June 2022.

Platinum and Gold suppliers also receive a host of other benefits including priority processing, prioritised access to Minimum Price Contracts and access to Alliance’s free store stock facilitation service.

If you would like to discuss your supplier status, or understand more about our loyalty programme, please speak to your livestock representative or contact Doreen Reid, our Shareholder Registrar.
 
 

Associate Director appointment

We are pleased to announce the appointment of Ross Bowmar as the co-operative’s 2022/23 Associate Director.

Raised in Southland, Ross and his wife Jess and their young family now own and operate Redcliffs Station, a high country sheep and beef station in the Rakaia Gorge in Canterbury.

Ross brings a wealth of international experience and knowledge to the role, having completed a Masters in Agricultural Economics at Michigan State University in the United States before spending 10 years with one of the world’s largest agricultural processing companies, Archer Daniels Midland (ADM).

He is actively involved in the rural community and was recently appointed Chair of the Meat & Wool section of Federated Farmers Mid Canterbury, among several other roles.

Ross replaces inaugural Associate Director Victoria Trayner, who finishes her 12-month appointment next month.

Read more about his appointment in the Rural News and the National Business Review.

 

Smithfield vegetable garden provides community resource

A vegetable garden established at our Smithfield plant in Timaru is being used to grow produce to help the local community. The garden is being run by Te Aitarakihi Society Incorporated (Te Aitarakihi), which operates a multicultural centre close to the plant.

Smithfield plant manager Karen Morris offered the unused area of land to Te Aitarakihi after learning they were keen to expand their vegetable planting. We have deep connections to the Smithfield community so this is a good way for us to do something meaningful and make really good use of a previously unused area of land.

The Te Aitarakihi team has been clearing and digging over the site, digging in lime and compost and installing a shed, compost bins and a further ten planter boxes.

 

Know Your Numbers Workshops

Under He Waka Eke Noa, all farmers need to know their GHG numbers by the end of this year. By the start of 2025, all farmers must have a written plan in place to measure and manage their emissions. If we can achieve this, it will help the industry stay out of the Emissions Trading Scheme and have a system that recognises carbon sequestration on farm and separates the price of methane from the price of carbon.

Starting tomorrow, Alliance Group is partnering with Beef + Lamb New Zealand to present Greenhouse Gas Calculator and Action Plan workshops across the country. Please visit the B+LNZ website for more information and to register.

Alliance farmer shareholder Leon Black was recently in the news talking about his low methane-emitting rams.
 

MyOSPRI eASD System

After the transition to the new MyOSPRI eASD system last weekend, OSPRI reported that by midweek, more than 3500 farmers had signed up and 412 ASD’s had been created. Farmers who are existing eASD users who haven’t created their new account should refer to the email sent to them by OSPRI. New eASD users can register using the link on the Farmer Portal home screen or click here.

OSPRI has lots of information about the new system on their website, Check out their videos and instructions here. Any problems, contact 0800 482 463.
 

Update from our global markets

Lamb

Rising global inflation continues to put pressure on disposable incomes within the European Union, United Kingdom and North American markets, which will likely affect lamb consumption. Higher volumes out of Australia are also impacting markets, particularly wider Asia and North America. The market in China has stabilised after recent price reductions with some products getting a slight lift in returns. The focus in China is on further processing for the food service sector. The Middle East market is quiet but we expect demand to improve following the end of the festive season. The ongoing global supply chain issues remain a concern. 

Mutton

Global mutton markets have eased. A diversified market portfolio targeting wider Asia, EU and North America remains important to ensure market stability along with a balanced production plan of carcases, 6 ways and cuts that allows maximum plant efficiencies, given NZ labour constraints while maintaining revenues.

Venison 

We have concluded our frozen key account business and product shipment is well advanced. Diversification across a number of markets means there is no backlog of frozen stocks. This has provided a more positive outlook as we move into the Game Season. Chilled negotiations for September and October production are well advanced with demand firm, in spite of ongoing COVID-19 issues. An improved supply chain is critical to ensure timely chilled arrivals to meet the Game season demand.

Beef

Despite challenges across the supply chain, restaurant closures due to COVID-19 and hot summer weather, interest from customers in China remains firm. Beef cut and beef offal prices are unchanged, with bone items down 5-10 per cent as summer demand is typically lower. Importers are planning for Chinese New Year and prioritising building that position. The US market is unchanged with weaker trading conditions and US grinders focusing on lower cost domestic beef while it is available. The domestic processing volumes remain at a high level and this is expected to slowly reduce towards the end of the year. NZ and Australia continue to supply limited volumes at premiums over the South American suppliers (NZ@38% and Australia@18% of annual quota). Inflation remains a major concern in the US, with importers continuing to highlight the challenges of the domestic economy. The Asian market demand remains firm across beef cuts and lean/fatty trimmings, with Korea and Japan continuing to provide opportunities to move both lean and fatty trimmings at stable values. The long term outlook is for pricing and demand in China to remain steady and demand  in the US to remain soft.

Co-products/Specialty Ingredients & Materials

Pricing on bovine hides is steady with calf skins strong as demand from our long-time customers translates to high pricing. Record high pricing remains for tallow and in the biosciences area. Demand across the SIM categories is steady.

 

Warm Regards


David Surveyor – Chief Executive
 

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