Latest / Early Edition with Ryan Bridge / Dan Boulton: Silver Ferns Farms chief executive says downward trend in meat processing won't continue forever

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Dan Boulton: Silver Ferns Farms chief executive says downward trend in meat processing won't continue forever · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: Alliance Meatworks are set to close it's Smithfield plant and
• 0:03
  Speaker 1: Timadou by the end of the year, resulting in the
• 0:05
  Speaker 1: loss of about six hundred jobs. It's a huge loss
• 0:08
  Speaker 1: for the sector and we need plants like it to
• 0:11
  Speaker 1: process our meats. Dan Bolton is the Silver Fir and
• 0:14
  Speaker 1: Farms chief executives with me this morning. Dan, Good morning, Dan,
• 0:20
  Speaker 1: can you hear me right there?
• 0:22
  Speaker 2: Yeah? Fine, Oh there we.
• 0:23
  Speaker 1: Go, Dan, Welcome to the show. Good to have you on.
• 0:26
  Speaker 1: Is this a worry when we hear about these closures?
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  Speaker 2: Clearly a worry when there's many job losses there and
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  Speaker 2: devastating for the people of the Timory community. You know, Ryan,
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  Speaker 2: that's extually my hometown and Silver and Farms we have
• 0:41
  Speaker 2: our own workforce and Timory, so I know how much
• 0:43
  Speaker 2: the locals are hurting after this announcement right now.
• 0:47
  Speaker 1: Is this because our stock is reducing in the you know,
• 0:52
  Speaker 1: we don't need the capacity at these meatworks anymore or
• 0:55
  Speaker 1: what's going on here?
• 0:57
  Speaker 2: Yeah, that's exactly right. So she numbers have been declining
• 1:01
  Speaker 2: and you know, our farmers, particularly sheep farmers, have had
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  Speaker 2: some better land news options in front of them, as
• 1:07
  Speaker 2: you know, that's predominantly been linked to the settings that
• 1:10
  Speaker 2: have allowed pine trees to be planted on productive sheep
• 1:13
  Speaker 2: country in you couple that with probably eighteen months of
• 1:16
  Speaker 2: relatively depressed land export returns and that's just accelerated that change.
• 1:20
  Speaker 2: So land news change is a big part of it.
• 1:23
  Speaker 2: But you know, civil food and farms, we don't accept
• 1:26
  Speaker 2: that trend will continue. We feel there's an excellent future
• 1:30
  Speaker 2: demand for New Zealand produced, particularly sustainable produced protein, and
• 1:34
  Speaker 2: that includes our land. But as an industry, you know,
• 1:36
  Speaker 2: we're going to have to evolve and be innovative to
• 1:39
  Speaker 2: ensure we can capture that. And you know, in our sheep,
• 1:42
  Speaker 2: beef and venison, farmers deserve to thrive. But to do that,
• 1:45
  Speaker 2: they're going to need a really strong and efficient and
• 1:48
  Speaker 2: viable processing sector and that's going to require investment, and
• 1:52
  Speaker 2: then it requires investment in our processing facilities. But I
• 1:55
  Speaker 2: think what we're seeing at the moment is just a
• 1:58
  Speaker 2: realignment of processing capacity versus the available available land numbers.
• 2:03
  Speaker 2: And I guess when you've got too much capacity, there
• 2:05
  Speaker 2: needs to be an adjustment because a large, expensive infrastructure
• 2:10
  Speaker 2: to run. In history shows that industries had to adapt
• 2:14
  Speaker 2: over time to make sure we have an efficient network.
• 2:18
  Speaker 1: Plus a big labor because so it would Silver Firm's
• 2:22
  Speaker 1: Silver Firm potentially look at investing in somewhere like well
• 2:26
  Speaker 1: more in some way, like to try and create more
• 2:28
  Speaker 1: capacity there.
• 2:29
  Speaker 2: Yeah, or we already have a large process and capacity.
• 2:32
  Speaker 2: But I think you know, is there you know, I
• 2:34
  Speaker 2: think the question you're asking is is there a challenge
• 2:36
  Speaker 2: there for farmers in that region. I think they're still
• 2:39
  Speaker 2: sufficient capacity across that wider south canabary Otago Canterbury region,
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  Speaker 2: So I don't think there's going to be a challenge
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  Speaker 2: there for farmers to get the animals processed in that
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  Speaker 2: particular area For the season ahead.
• 2:51
  Speaker 1: How's the outlook looking. We're expecting farm gate prices from
• 2:54
  Speaker 1: processes and exporters soon. How how are things tracking?
• 2:58
  Speaker 2: Yeah, actually be looking really good, you know, and particularly
• 3:01
  Speaker 2: off the demand and the supply shortage up into the USA,
• 3:05
  Speaker 2: but also other key markets are performing well Japan, Korea,
• 3:08
  Speaker 2: Europe and even China on chilled beef items is looking
• 3:11
  Speaker 2: really positive. And I think you know, today all beef
• 3:14
  Speaker 2: farm gate pricings that record high, so not a lot
• 3:17
  Speaker 2: to complain about there, and even prime beef is looking
• 3:20
  Speaker 2: pretty good. So we're seeing beef pricing remain firm as
• 3:24
  Speaker 2: we move into twenty twenty five and probably sitting about
• 3:27
  Speaker 2: seventy cents to a dollar above the five year average,
• 3:29
  Speaker 2: and I think farmers will be pretty happy with that outcome.
• 3:33
  Speaker 2: For lamb farmers, you know, and that's clearly pricing hasn't
• 3:36
  Speaker 2: been where it's needed to be and still sitting below
• 3:39
  Speaker 2: the five year average. But you know that's been driven
• 3:42
  Speaker 2: by an oversupply out of Australia with them at record
• 3:45
  Speaker 2: production level. So but that said, we're seeing that for
• 3:48
  Speaker 2: supply position for casts. Even we're actually seeing some shortages
• 3:51
  Speaker 2: now on lambs up in the UK and EU market
• 3:54
  Speaker 2: said some pretty favorable price signals as we head into
• 3:57
  Speaker 2: twenty twenty five. So we're seeing lamp pricing aspect to
• 4:00
  Speaker 2: more sustainable levels for our farmers, which is exactly the
• 4:03
  Speaker 2: news after and believe it or not, we're actually getting
• 4:07
  Speaker 2: some outstanding pricing on certain items such as lamb ranks
• 4:10
  Speaker 2: and lamb lloyans that we all love. But unfortunately there's
• 4:13
  Speaker 2: the whole, the whole animal we need to sell. We've
• 4:15
  Speaker 2: sort of got to get the rest of the carcass
• 4:17
  Speaker 2: pricing back up to where it needs to be, and
• 4:19
  Speaker 2: China's going to play an important part of it, and
• 4:22
  Speaker 2: we're getting some green shoots coming out of China as well.
• 4:24
  Speaker 2: So it's on heading in the right direction, but still
• 4:27
  Speaker 2: a little bit more to go for our lamb Farmer's good.
• 4:30
  Speaker 1: Nice to finish on some positive news. Dan, Thank you
• 4:32
  Speaker 1: very much for your time this morning. It's Dan Bolton's
• 4:34
  Speaker 1: silver Fern Farms chief executive.
• 4:37
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• 4:40
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• 4:43
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