The Country 17/02/26: Tom Young talks to Jamie Mackay

The National Livestock Manager for Affco says while farmers are enjoying record returns for red meat, the meat companies are not making money, and the current prices are not sustainable. 

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Episode Transcript

Speaker 1 (00:00):
Here's a f co's National Livestock Managers name is Tom Young.

(00:03):
We're going to talk about red meat. Very expensive at
the moment, very good returns for farmers, but can it
last before we do though? Tome, you're based out of
Hawk's Bay. How's the weather. I understand you guys have
fared a bit better than other places in the North
Island and other places in the South Island as the
storm moves south.

Speaker 2 (00:22):
Yeah. Well, hi Jamie, Yeah no, we actually probably came
through the weather event in a pretty good state. So
at my place in what I had thirty or forty
miles of rain and a little bit of win. But
we haven't had anywhere near the problems are the regions
have had, so we don't have anything to complain about
it at all.

Speaker 1 (00:38):
Really, all this rain in the North Island means a
hell of a lot of grass and that has seen
the store stock market go nuts, for want of a
better word.

Speaker 2 (00:49):
It sure has, yep, and I think well, speaking from
perspective over here, I mean we've got more grass and
I've probably seen in three years. But we've seen a
lot of speculation around the value of I guess the
future venues of old fat stock, and so people are
chasing stores stock pretty hard and paying a lot of

(01:09):
money for it. I can say it is likely that
there are schedule drops coming. So we were sitting now,
we're not making any money, and we've had the New
Zealand dollar against us for quite some weeks. Markets overseas
are starting to soften, and we need to have suddenly
going into the bent now to maintain the factories and

(01:31):
also spend money on capic. So this is a bit
of an industry wide thing, not just an f CO thing.
So it's likely schedules will start to decline.

Speaker 1 (01:40):
At the moment, lamb is nearly what eleven dollars a kilo,
It's never been there before record prices. Beef is over
nine dollars a kilogram. We look at those numbers from
the Meat and Industry Association for twenty twenty five, a
red meat worth eleven point seven billion, a sheep meat
four point seven billion, up thirty one percent in value,

(02:03):
beef worth five billion to our economy up fifteen percent
in value despite decreases in volume. Are these levels sustainable.

Speaker 2 (02:15):
Well, based on what I'm seeing today, probably not not.
In the short term. I think we've probably got a
bit of a perfect storm, and we've been through a
perfect storm where we've had Obviously, the schedules have chased
themselves up. The markets have gone pretty well. But now
where we're sort of sitting, we were sitting mainly because
of the shortage of stock. Everyone's got grass. But I think,

(02:37):
you know, in the next probably a month or two months,
we've certainly got to see some sort of decline in values.
But hey, look if you had if you took a
dollar out of a lamb, a dollar achilo and you
came back to ten, I don't think too many people
would be complaining about that in March April, would they?
And if you took a dollar achilo out of beef
and you came back to eight dollars early eight, So

(02:57):
it's still spectacular money. Tom.

Speaker 1 (02:59):
You're not trying to talk on the market, are you.

Speaker 2 (03:02):
Well? I sort of am, because I think it needs
to get a bit more real, and I think it's
a little bit overcooked at the moment, to be honest.

Speaker 1 (03:09):
So Tom Young, how to hawks by you're busy talking
down the market, you obviously haven't got in the air
of Mark Warren, who's talking about a fifteen hundred dollars, Lamb.

Speaker 2 (03:18):
Yeah, that's that's a good price, Lamb, isn't it. I mean,
I thought I thought we'd done pretty well when we're
paying a farm around there tend on a ninety mark.
But obviously Mark Warren's got the rest speeder to sell
it for a little bit more. So we won't talk
about it anymore, Jamie, What.

Speaker 1 (03:34):
About the age old problem for the meat industry, as
you fight for stock a procurement war, there'll be one
of those coming up at the end of the season,
as surely as night follow's day.

Speaker 2 (03:45):
Well, there's already one now. I don't think there's any
such thing as any week that goes by where there
isn't procurement tension. So the days of having spear stock
in the summer, and you know, and people could probably
lean on the schedule a bit and take money out
of it pretty much over So when when we start
taking money out of schedules, now we're doing it for
the reasons that there is I guess little margin left

(04:07):
to work on. And so the old days we had
thousands of spear lambs or thousands of spear kettle we
just don't see it anymore.

Speaker 1 (04:15):
Did you? Celebrate National Lamb Day on Sunday.

Speaker 2 (04:19):
No I didn't. Actually, no should I?

Speaker 1 (04:21):
Well you should have. You've probably got access to a
lamb rack reasonably cheaply, I would imagine, Tom, Come on, I.

Speaker 2 (04:27):
Think I did have a piece of rebbel of that count.

Speaker 1 (04:29):
I mean, it's not on National Lamb Day. Look, I
must say I went to my local countdown because I've
been mouthing off about National Lamb Day all last week.
I thought I better walk the walk as well as
talk the talk. And I was able to buy a
lovely lamb leg roast for nineteen dollars ninety nine a kilo,
and the farmers getting eleven bucks a kilo. That's great,
that's great buying.

Speaker 2 (04:51):
Yeah, it is good buying. It is good buying. It
was only a year, it was only a month or
two back. They were probably selling those leagues for eighties
ninety dollars from what I recall.

Speaker 1 (04:57):
I think they still are in some places. But got
on countdown a shameless plug. The supermarkets get plenty of
grief for specialing lamb on National Lamb Day. Okay, Tom,
We'll await with baited breath to see whether you can
talk the market down and make

Speaker 2 (05:11):
Some money, yes, Thanks Jamie,