New Zealand sheep farmers call for collaboration

Nothing bothers a Canadian lamb producer more than the sight of frozen New Zealand lamb in the local supermarket. Owen Poole says they should look at it differently.

“We shouldn’t be seen as competition. The challenge that brings us together is to make sure there is lamb on everyone’s dinner table all year long,” says Owen Poole, president of Alliance Group, a co-operative with about 5,500 members and New Zealand’s largest supplier and processor of lamb meat.

Poole notes that lamb represents a mere four per cent of global meat consumption — the lion’s share belongs to pork, chicken and beef. “That’s our real competition,” he says.

New Zealand is home to 33 million sheep compared to about one million in Canada. Canadian consumers, especially ethnic communities, are developing a growing fondness for lamb meat but Canadian suppliers are only capable of satisfying half of demand. Therefore more than 70 per cent is imported from New Zealand, whose customer base of 4.3 million people only consumes about five per cent of production. The rest goes for export.

Alliance Group own a network of nine slaughter facilities, with a capacity of 32,000 head per day currently processing more than seven million sheep and other species per year. Carcasses are scanned by computer and divided into various cuts and dispatched across the world. Asian customers, especially in China, take the less popular cuts such as offal, breasts and necks.

To meet the more demanding markets such as Germany, France, and Belgium which need to be supplied 52 weeks per year, Alliance Group has concluded strategic alliances. It works with sheep producers in Uruguay to supply Latin America, and to meet North American demand, Alliance established The Lamb Company, a consortium which includes another New Zealand co-operative and an Australian company. The Lamb Company has offices in Toronto and supplies frozen and refrigerated lamb shanks and legs of lamb to supermarket chains like Costco and Loblaws.

Despite abundant rain and year-round grazing, “We have our share of challenges,” says Poole. Deadly storms blew through New Zealand in the spring of 2010 and devastated the North and South islands, killing 1.6 million sheep. Poole says that’s why strategic alliances are so important to ensure their markets are supplied, especially given logistical problems when clients are largely located more than 10,000 kilometres away.

The dramatic growth of New Zealand’s dairy production, a virtual Saudi Arabia of milk, led 750 lamb farmers to switch to dairy production over the past five years. And the afforestation of mountainsides, supported by the New Zealand government to help meet its obligations under the Kyoto Protocol, has removed grazing land from sheep farmers.

“Lamb is an expensive meat to produce and is usually a luxury product,” says Poole, stressing the importance of a common merchandising strategy. He says Canadian lamb farmers have a competitive edge, primarily that of being closer to its markets. They also have technological capacity to produce up to three lambs in two years period since reproduction can be better controlled in a pen than on vast pastures. New Zealand breeders are restricted to a single lambing per year.

Alliance Group member Jonathan Wallis, who grazes 7,500 sheep on a 20,000-hectare mountainside property bordering Lake Wanaka, agrees with Poole. “We’ll never be able to fulfil all of our markets on our own. There is more to be gained by working together.”

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