Silver Fern Farms is to cease paying headage payments for livestock supplied by third party agents.
Supply chain manager Dan Boulton says SFF has been phasing out supply from third parties for the last decade, which have fallen from about 18% to less than 2% currently.
“We recognise third parties and rural servicing firms provide value to farmers but SFF is not shying away by saying we want a direct relationship between farmers and the smallest number of people between consumers and suppliers,” Boulton said.
He says the new measure, to apply from October 3, is an integral part of its plate to pasture marketing strategy and its commercial relationship with consumers and suppliers.
The company has 85 livestock reps who Boulton says have relationships with farmers and into whom it has invested training and technology.
He has advised rural servicing firms of the change, but because it was telegraphed several years ago, it did not come as a surprise.
Chief executive Simon Limmer told suppliers in a newsletter the importance of that farmer-processor relationship was accentuated during the disruption of the past year.
“Whether that be lockdowns, droughts, overflowing ports or changing global consumer trends, we’ve needed close relationships with our farmer suppliers to be nimble in response to these disruptions,” Limmer said.
He says this change will only impact a small number of suppliers who still supply livestock via a third party.
“Processing capacity across our network will still be available to these suppliers, however, no future third party headage payments will be made from this date,” he said.
“A third party agent may continue to be involved in the transaction on behalf of the supplier, but from October 3 this will be a cost to the supplier.”
