Harrison is so confident about future sheep and beef prospects that he has invested in his own Mid-Canterbury foothills farm.
«Much of this new demand will be supplied by chicken and pork, but it will open up unprecedented opportunities for red meat and particularly beef,» Harrison told a Beef + Lamb New Zealand FarmSmart seminar in Christchurch.
By 2050, 60 per cent more meat will be needed to satisfy middle class demand. At the centre of this demand growth was China. Before the late 1990s, China barely had a middle class. In 2000, five million Chinese households made between $11,500 and $43,000 a year.
Today, 225 million Chinese are in this wealth category. By 2020, China may have a bigger middle class than Europe, said Harrison, quoting figures from The Economist.
«This stunning development has boosted growth around the world and transformed China.»
Anzco has been the exclusive supplier of New Zealand lamb to the Waitrose supermarket chain in the United Kingdom for the last 20 years. Waitrose had a 5.5 per cent share of the UK grocery market, but 9 per cent for lamb, through its 330 stores.
Lamb was now the most expensive major meat in the UK, priced higher than beef and well above pork. However, demand can be turned off if prices rise too quickly, with sales taking a hit at Waitrose stores when lamb prices rose 54 per cent between 2010 and 2012. «Even four years later we have not recovered to 2010 volumes. So the market is not immune to price.»
Anzco’s Five Star Beef feedlot at Wakanui, in coastal Mid-Canterbury, was the only large-scale feedlot in Australasia that had never used hormonal growth promotants or genetically-modified feed. «High-end customers increasingly want natural beef that is not only HGP and GM-free, but antibiotic-free.
«Anzco’s future business direction is to increasingly invest in what we describe as ‘food plus’, including food solutions, health care and food ingredients. New facilities have been constructed to service specific customers. The stainless steel in these mirrors dairy more closely than the traditional meat industry.
«Healthcare and food solutions including blood, animal tissue and protein products are adding value to traditionally low-value items that in the past were consigned to rendering.»
Harrison said the problem for sheep farmers has been the demise of wool. In the mid-1960s, 50 per cent of a sheep and beef farmer’s revenue came from wool. Now it is just over 10 per cent.
«Farm revenue reliance is now placed almost entirely on meat. Without a better second income stream, sheep farmers will continue to struggle.»
If all agricultural trade barriers were removed, beef and sheepmeat returns would increase by more than 50 per cent and in dairy by 20 to 100 per cent depending on the product. «Total elimination of trade barriers is a lofty goal and won’t be achieved in my lifetime, but continuing investment by New Zealand in this effort will provide handsome rewards and ensure the agri-food sector continues to play a dominant role in the economy.»
From a Mid-Canterbury farming background, Harrison has owned part of his father’s former farm at Highbank near Methven, for many years, installing irrigation and raising beef.
In May last year he bought a hill country property with flats at Alford Forest in the Mid-Canterbury foothills. Since then refencing and development on the flats has been largely completed, with development of the hill blocks to be tackled from next year.
The property is farmed by his daughter and son-in-law, Michelle and Daniel Carson, with the major income streams coming from raising young bulls, along with sheep and angus cattle.
«I am confident in the future of farming and that is why I have joined your ranks,» Harrison said.
Anzco is New Zealand’s second largest beef company and third largest meat business, with 3000 employees and annual sales revenue of $1.54 billion for the year ending September 30, 2015. The company operates New Zealand’s only large-scale cattle feedlot, seven slaughter and processing sites, three food manufacturing food sites and an innovation centre.
Source: Stuff