Straggle Muster 149 - 1/4/2005
An Outsider's View - Aaron Meikle, Meat and Wool New Zealand.
I recently had the privilege of spending three days in the company of Canadian Susan Hosford, of Alberta Agriculture Food & Rural Development. Susan is closely involved with the Canadian sheep industry and was a sheep farmer herself. Over three days Susan visited a couple of our sheepmeat processors and also spent most of a day on a sheep farm following the process of drafting a line of lambs for slaughter. The Canadian Sheep industry is going through a rebuilding phase similar to that which New Zealand went through in the 1980s and 1990s, albeit on a much smaller scale, and Susan was interested to see how things are done here.
Talking to somebody with an outside perspective on our sheep industry is fascinating because it highlights what others not so closely involved see as our key strengths and major threats. Some of the points I picked up from talking to Susan were:
The relationship between New Zealand sheep farmers and sheepmeat processors is unrivalled elsewhere in the world. While we have our grumbles and complaints, in Canada the processors are often large corporates who provide little or no feedback on product quality or destination. Farmers weigh off lambs, send them away, and receive virtually only a check. The kill sheets we get, with their wealth of information, are unheard of, and there is little guidance given on what is the 'ideal' product. But what seemed to impress Susan the most was the on farm visits of the drafter, sorting lambs and providing a face to face contact with the processor for the farmer.
The scale and consistency of our lamb production is a major strength. Large lines of lambs in a very tight weight range and grade translate into opportunities for highly consistent end product. A much smaller industry in Alberta, for example, makes it virtually impossible for them to supply large quantities of product to tight specifications. New Zealand and Australian lamb therefore dominate the marketplace, and Canadian sheep farmers have to look for niche opportunities around our product. This can lead to feelings of resentment by Canadian sheep farmers, but the approach of Susan and her colleagues is to try and foster cooperation between countries, and to grow the total lamb consumption, rather than fight over share of existing markets. If every Canadian ate as much lamb and mutton as New Zealanders do, we couldn't supply enough.
Cooperation between the world's sheepmeat industries is a key. Until recently the Canadian sheep industry made a significant part of its income from exporting sheep to the United States, which in turn had created some resentment in the US sheep industry. When a single BSE case was discovered in a Canadian cow, the border was also closed to sheep, despite no good evidence for such a move. If New Zealand wants to continue to export sheepmeat all over the world, it must foster goodwill in other sheep producing countries. This is part of the reason for Susan's visit here, and she was also impressed to see the ongoing "Tri-Lamb" talks (Australia, the US and NZ). New Zealand's lamb exports to Canada are worth several million dollars, but goodwill towards our exports in North America is priceless.
The biggest single weakness in the Canadian sheep industry is the cost of production. Wintering a ewe in Alberta costs around $100 Canadian, as a result of feed and housing costs. New Zealand doesn't have those costs, but does have to send product halfway around the world. One of the main messages I picked up from talking to Susan is that sheep farmers must always be careful to control the cost of producing their products. It is easy for costs to creep up while times are good, and this is what happened to some degree in Canada while lucrative exports to the US were available. When things turn down however, for example when Canada lost exports to the US, it can be very hard to pull those costs back to retain margins.
Aaron Meikle
Meat and Wool New Zealand
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