Supermarkets were fighting for market share in a very competitive environment and that was driving the price they paid the producer.
“And we have arrived at a situation where the cost of production is no longer sustainable around the price of the food we are producing,” the Fairlie farmer and South Canterbury Federated Farmers provincial president said.
And there were ramifications around that now as farmers engaged with environmental issues and sustainable food production.
“It’s a case of we are running down our natural capital that is really stressed and bursting at the seams.
“The temptation is to cut corners but that is not socially acceptable,” Adams said.
“But the reality is we can’t achieve all we want to achieve on the prices we are getting in this climate of cheap food.
“Farmers are engaged in the environmental space and trying to fund it with the current prices – it’s extremely difficult and we run the risk of being both socially and environmentally not sustainable.”
Adams said the core of the matter was the complexity in pricing in a depressed global meat market.
“The meat companies are desperate to get prices up and money back to their farmers but huge global uncertainty of which we have no control is underpinning confidence.
“We have a legacy of the way we do business. We are transitioning but we have yet to bear fruit,” Adams said.
Wool was the biggest disappointment, he said.
“The $3.40 a kilogram for hogget wool is shameful.
“Whether it’s the Chinese New Year or the European ski holidays, the market has gone horribly flat or wool is very sick but somewhere those buyers have invested a lot of money in machinery so that gives some hope they might be coming back into the market sometime soon.
“But the clock is still ticking and still we wait for a turn in the tide.”
Adams said the annual round of ewe fairs and onfarm store lamb sales, while giving a keen sense of where the market was at, had depicted a false sense of optimism.
“The Temuka two-tooth and ewe lamb fair in particular was disappointing in that it started with a hiss and a roar and wound down to a whimper.
“Either the market couldn’t cope with the number of stock on offer or people had not done their homework.”
While there was a degree of re-stocking, it was not driven by optimism.
“It’s more the fact sheep farming is what we do and we have to keep being good at what we do even if we are not being rewarded,” Adams said.
