Thursday, September 10, 2015

Silverfern Farms 'Strategic', Not Even Close.

  The entire  NZ Meat Industry may qualify in that category but there is absolutely nothing about a farmer supplier owned part player processor, I hesitate to call them marketer, in the meat industry to what I understand Strategic to involve.

Yes there is farmer supplier investment  in SFF and if the whole shambolic outfit went broke tomorrow it would have some dire effects for many but in the absence of any significant new meatworks being created, those that were built in the latter years of last century have all outlived the planned obsolescence and the older ones are more relics than meatplants.

The entire meat industry since the "Dunedin" departed New Zealand waters with the first refrigerated cargo of meat for the UK over 130 years ago, is littered with incompetence and manipulations bordering on fraud as aspiring entrepreneurs attempted to make their fortune.

One of the biggest hurdles that face investment in the meat export trade comes with farmer politicians who become elevated to  positions well beyond their individual and collective abilities.
As a young farmer back in the day I became a shareholder supplier to a farmer cooperative Primary Producers Co-operative Society or PPCS, to attempt to retake some of the ticket clipping that Bothwicks, Vestys, and other UK based meat traders seemed to be removing from our income stream.
To be able to supply PPCS, a farmer  was only paid 90% of the "schedule" that the master manipulators published weekly as the procurement price for the coming week, at time of kill with the remaining 10% plus any additional profits distributed as a bonus at the end of the seasons trading and those bonuses were proof that there was some profit able to be realised for the producers.
Of course such suppliers were required to "invest" capital into  the balance sheet of the co-op  that came out of the end of year settlement so the actual additional profit often only came by way of increasing shares.
All well and good until a financial wizard decided to expand PPCS with the inevitable outcome  that he made a small fortune and the farmer shares were disappeared.

What ever SFF, it is a subsequent vehicle that includes the pitiful remains of PPCS, becomes, if they turn out to be a dog then farmers will take their business to Alliance,  CMP or even yet another  fresh faced entrepreneur will emerge and either buy an existing plant or better, build a new one as the late Graeme Lowe did with Oringi just south of Dannevirke back in the day. A works he built in a paddock said to have a life of 20 years and was decommissioned by later operator PPCS after nearly 30 years of operation.

So to the whinging numpties who have half baked opinions on where to next for SFF, just keep your opinions to your self or get your own money out of the hip pocket of your shiney arsed cheap suit.
The absolutely last thing the meat industry needs is for more bureaucracy to get involved as there are enough money grubbing "crats" involved already, troughing their unproductive lives through the farmers money as it moves between them and the consumer of their produce.

Yes Little Man I am talking to you.


Noel said...

Was a time when integrated steel mills, airline, power generation and the like were identified as strategic assets. On that value there are none today.

Chris Bird said...

Interesting article in the Herald with Bill English saying it is up to the shareholders in Silver Fern farms, mainly farmers, to decide the future of their Co-op, and it is not up to Govt to put up finance for a private business.
If they want to keep it then they need to put hands in pockets and put the required capital up for this purpose.
Reminds me of my dad saying years ago that when a meat works Co-op was started at Belfast I think before the war my Grandfather was a shareholder along with most other farmers in North Canterbury. He went round buying up stock and supplying the struggling business at a loss to him to try and make it work while a lot of other shareholders, when the company down the road offered them another 6 pence per pound jumped ship and followed the money.
New Zealand farmers are their own worst enemy.

The Veteran said...

Not sure what an 'integrated steel mill' is over an ordinary steel mill and doubt that airlines can ever be considered a strategic asset. Power generation surely is and that is why the sell down of the energy companies is restricted to 51% but a meat works ... never.

Noel said...

Forgot ammonia/urea plants, methanol plants, CNG and petrol refineries now all gone from the public purse.

Integrated steel mills take raw product to produce steel then roll and shape it.

Not many left in the western world but they were the must have of Governments during the 1950's and 1960s.

gravedodger said...

@ Noel, rightly so as regards that list at 0822 but what is it with steel, China could supply the world not that quality would always be sufficient. Bert Munroe wanted steel from Caterplllar in the US for Push rods on his motorcycles, the absolute best in his opinion.

Back in the day Noel, someone had to provide a night cart service to deal with the shit now people just leave it on a blog.

Pray tell me exactly why a slaughter house might be "strategic"? Possibly was for Herr Himmler I guess.