Farm IQ presents tantalising vision

01-11-2010 | Rebecca Harper

Transforming the red meat industry from "declining" to "thriving" and growing annual returns by $2.8 billion by the year 2025 is a tantalising vision for most New Zealand farmers.

The FarmIQ Systems team have that goal and nearly $60 million from the Government to help make it happen - all they need now is farmer buy-in.

Silver Fern Farms, PGG Wrightson, Landcorp Farming and the Government (MAF) will jointly fund the $151 million programme aimed at turning around the ailing industry.

The seven-year programme will be run as a joint venture through a new company called FarmIQ Systems Ltd. Private-sector partners will provide 61%, or $92 million, of the total $151 million investment.

Silver Fern Farms, as lead investor, is contributing 45% ($68 million) of the total while co-funders PGG Wrightson and Landcorp Farming will provide mix of capital, in-kind skills and advice, nutritional expertise and resources.

Throughout September and October the company took a roadshow to 10 towns around the country, explaining to farmers exactly what they planned to do and encouraging them to support the idea.

At the Feilding event, Silver Fern Farms integrated category manager Grant Howie said

"Stage one is working together to establish the plan. We are totally passionate and confident. Not only will we stop the rot, we will be booming."

Howie said they aimed to turn a "desert of low productivity" into a thriving green pasture. "If we don't change we won't be the backbone of the economy - I don't think we are the backbone now."

He said thriving markets would pay more money for red meat if it was a high-quality, consistent and well-marketed product. The way forward? A pasture-to-plate approach with integrated supply chains.

Howie told farmers consumers wanted to pay them more money for their product, "we just haven't done enough to get that money out of their pockets".

To get those consumers to reach into their pockets he outlined the perfect product: It had to look good, smell good and taste good - think melt-in-the-mouth steak, tender and juicy or a succulent lamb chop.

"This may seem like a basic first step, but the problem is, we do not get that step right consistently enough.

"Not only do we need to consistently produce a delicious product, but consumers need to know it is good for them, convenient, has a good story, is safe, good for the planet and they need cooking instructions."

Figures from the NZ Institute for Economic Research (NZIER) showed the change to market-leading, consumer focused products could add $2.8 billion in value by 2025, and those were conservative figures, Howie said.

The new packaging and branding used by SSF for a roast leg of lamb sold domestically was used as an example. The lamb was attractively packaged, with clear branding and had a recipe on the packet. It had been advertised on television and sold for $37.47 a kilogram.

"We have a vision to transform all our products around the world into these types of packs ... it has been successful in NZ. We now own the top end of the premium lamb sector - they're going off the shelves in Auckland like hot cakes.

"High-paying consumers are out there and our product deserves to be marketed like this."

FarmIQ was set up to encourage participation and would include demo farms, web-based communication and market tours.

PGG Wrightson's Greg McSkimming said farmers made decisions every day that affected their profit.

A 2009-2010 pilot trial of 50 farms included 75,000 lambs contracted to SSF and all animals were EID tagged, allowing data to be captured electronically and analysed.

"We ended up with an elite group of lambs that fattened heavier and faster."

The data allowed them to ask questions like where were the lambs bred, what was their breeding, what forages were eaten, did they come off hill country or low land? These questions would enable them to apply the results to an entire mob and lift productive capacity.

FarmIQ has created a web portal www.farmiq.co.nz, launched on October 1, for farmers to access information about their own farm and about the market.

Software would enable farmers to enter their own information and access reports. "It will provide a snapshot ... what's driving overall production on your farm? Is there a trend, is it profitable?"

Regional focus farms across the country meant they could pull together on-farm intelligence and benchmark it. "We will also use these farms to showcase the latest and greatest in technology and equipment, like EID gear and scales. You can see how it works and if you want to take it home and adopt it, you can."

EID was the key to collecting all the information and creating a database, and all animals entered into the programme were required to be tagged. "Imagine the knowledge across the country; it would create a huge amount of value."

Jeremy Absolom, probably best known for his role at Rissington Breedline, has also come on board as acting general manager of value chains for SSF. He explained how farmers could participate in the venture, directing them to the website to sign up.

FarmIQ is targeting 250,000 lambs in the approaching season and 500,000 in 2011. For both beef and deer the 2010-2011 target is 50,000.

Customer working groups would also be established, he said. "It's about shortening the supply chain, getting retailers to empathise with some of the on-farm challenges." This also applied to farmers - understanding that retailers were working to specifications that might require modifications to be made on-farm.

"Millions of dollars is going to go into the development; we need your help."

It was the farmer's choice how many animals they committed and although FarmIQ was providing the framework, it was not a prescription. They are aiming for 1% uptake in the first year.

"We are determined the money is not going to be squandered, but it will only work if farmers get involved."

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