Thursday 3rd February 2011
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Fine wool marketer The New Zealand Merino Company (NZM) is working with meat company Silver Fern Farms to offer meat contracts alongside existing contracts for fine wool to its growers.
NZM's growers are being offered three-year direct supply meat contracts with incremental price increases year on year. Through the dual contracts, NZM growers can forecast their earnings and shield themselves from commodity and currency fluctuations.
The meat contracts replicate the model used for wool contracts.
"Growers will be rewarded for investment in marketing and innovation with long term and sustainable contracts," NZM chief executive John Brakenridge said.
"It's a turning point for the six billion dollar red meat industry. Growers now have choice and a viable alternative to dairy grazing in some regions," said Brakenridge.
Silver Fern Farm's chief executive Keith Cooper said the sheep meat industry had been largely commodity based and a major step change was required to ensure the sustainability of the sector.
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