Dan Boulton: Silver Ferns Farms chief executive says downward trend in meat processing won't continue forever

The meat processing sector is being encouraged to evolve to ensure it captures future demand.

Alliance Group's confirmed Timaru's Smithfield meatworks will shut by the year's end due to declining sheep numbers – cutting up to 600 positions.

BusinessDesk reports rival Silver Fern Farms wants to be constructively involved as Alliance works through a capital raise.

Chief Executive Dan Boulton told Ryan Bridge he doesn't believe this downward trend will continue forever.

“Our sheep, beef and venison farmers deserve to thrive, but to do that, they’re going to need a really strong, efficient, and viable processing sector and that’s going to require investment.”

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Episode Transcript

Speaker 1 (00:00):
Alliance Meatworks are set to close it's Smithfield plant and
Timadou by the end of the year, resulting in the
loss of about six hundred jobs. It's a huge loss
for the sector and we need plants like it to
process our meats. Dan Bolton is the Silver Fir and
Farms chief executives with me this morning. Dan, Good morning, Dan,
can you hear me right there?

Speaker 2 (00:22):
Yeah? Fine, Oh there we.

Speaker 1 (00:23):
Go, Dan, Welcome to the show. Good to have you on.
Is this a worry when we hear about these closures?

Speaker 2 (00:30):
Clearly a worry when there's many job losses there and
devastating for the people of the Timory community. You know, Ryan,
that's extually my hometown and Silver and Farms we have
our own workforce and Timory, so I know how much
the locals are hurting after this announcement right now.

Speaker 1 (00:47):
Is this because our stock is reducing in the you know,
we don't need the capacity at these meatworks anymore or
what's going on here?

Speaker 2 (00:57):
Yeah, that's exactly right. So she numbers have been declining
and you know, our farmers, particularly sheep farmers, have had
some better land news options in front of them, as
you know, that's predominantly been linked to the settings that
have allowed pine trees to be planted on productive sheep
country in you couple that with probably eighteen months of
relatively depressed land export returns and that's just accelerated that change.

(01:20):
So land news change is a big part of it.
But you know, civil food and farms, we don't accept
that trend will continue. We feel there's an excellent future
demand for New Zealand produced, particularly sustainable produced protein, and
that includes our land. But as an industry, you know,
we're going to have to evolve and be innovative to
ensure we can capture that. And you know, in our sheep,

(01:42):
beef and venison, farmers deserve to thrive. But to do that,
they're going to need a really strong and efficient and
viable processing sector and that's going to require investment, and
then it requires investment in our processing facilities. But I
think what we're seeing at the moment is just a
realignment of processing capacity versus the available available land numbers.

(02:03):
And I guess when you've got too much capacity, there
needs to be an adjustment because a large, expensive infrastructure
to run. In history shows that industries had to adapt
over time to make sure we have an efficient network.

Speaker 1 (02:18):
Plus a big labor because so it would Silver Firm's
Silver Firm potentially look at investing in somewhere like well
more in some way, like to try and create more
capacity there.

Speaker 2 (02:29):
Yeah, or we already have a large process and capacity.
But I think you know, is there you know, I
think the question you're asking is is there a challenge
there for farmers in that region. I think they're still
sufficient capacity across that wider south canabary Otago Canterbury region,
So I don't think there's going to be a challenge
there for farmers to get the animals processed in that
particular area For the season ahead.

Speaker 1 (02:51):
How's the outlook looking. We're expecting farm gate prices from
processes and exporters soon. How how are things tracking?

Speaker 2 (02:58):
Yeah, actually be looking really good, you know, and particularly
off the demand and the supply shortage up into the USA,
but also other key markets are performing well Japan, Korea,
Europe and even China on chilled beef items is looking
really positive. And I think you know, today all beef
farm gate pricings that record high, so not a lot
to complain about there, and even prime beef is looking

(03:20):
pretty good. So we're seeing beef pricing remain firm as
we move into twenty twenty five and probably sitting about
seventy cents to a dollar above the five year average,
and I think farmers will be pretty happy with that outcome.
For lamb farmers, you know, and that's clearly pricing hasn't
been where it's needed to be and still sitting below
the five year average. But you know that's been driven

(03:42):
by an oversupply out of Australia with them at record
production level. So but that said, we're seeing that for
supply position for casts. Even we're actually seeing some shortages
now on lambs up in the UK and EU market
said some pretty favorable price signals as we head into
twenty twenty five. So we're seeing lamp pricing aspect to
more sustainable levels for our farmers, which is exactly the

(04:03):
news after and believe it or not, we're actually getting
some outstanding pricing on certain items such as lamb ranks
and lamb lloyans that we all love. But unfortunately there's
the whole, the whole animal we need to sell. We've
sort of got to get the rest of the carcass
pricing back up to where it needs to be, and
China's going to play an important part of it, and
we're getting some green shoots coming out of China as well.

(04:24):
So it's on heading in the right direction, but still
a little bit more to go for our lamb Farmer's good.

Speaker 1 (04:30):
Nice to finish on some positive news. Dan, Thank you
very much for your time this morning. It's Dan Bolton's
silver Fern Farms chief executive.

Speaker 2 (04:37):
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