The NZMB aims to help capture the best possible ongoing returns from quota markets for New Zealand and the meat industry. It also manages the investment of industry reserve funds, providing funding from these reserves for a range of activities in the interests of sheep and beef farmers, including for industry-good activities.
In February, the NZMB requested feedback from 14,000 farmers as part of its Annual Meeting information on a proposal to provide funding of up to $1 million to Beef + Lamb New Zealand (B+LNZ) for B+LNZ Genetics and amend its reserves policy.
Almost three quarters of respondents (73%) to the consultation backed the proposed funding to B+LNZ Genetics.
NZMB has been one of the funding partners for B+LNZ Genetics for seven years.
In 2019, B+LNZ Genetics was amalgamated back into B+LNZ and farmers tell us they value the significant benefits it continues to provides to the industry.
Meanwhile, more than two thirds of respondents (68%) to the consultation supported amendments to the NZMB’s reserves policy.
The NZMB’s reserves management policy outlines how the board’s $76 million of reserves are able to be accessed to manage a contingency event impacting export markets, quota management and annual industry-good funding.
The major amendment to the reserves policy is defining the funding available for industry good as “cash returns (interest and dividends) less cash expenditure including investment management fees and reserve management costs”.
Unrealised gains and losses on the investment portfolio have now been excluded from the definition.
This change makes it explicit that the reserve fund has two statutory purposes. Firstly, it is to hold contingency and quota jeopardy reserves.
Secondly, it is to generate income for industry-good funding application. This change prevents the Board from accessing unrealised gains as the portfolio value is being grown.
The application and criteria for funding from reserves income has also been updated.
The intent of the reserves policy has not been changed. These amendments bring the reserves policy up to date with current reserves balances and include improvements based on what has been learnt since implementing the new investment policy.
Respondents to the consultation supported a prudent approach to exclude unrealised gains from cash being available and the importance of sound management of reserves.
The Reserves Policy can be read on the New Zealand Meat Board website.
An update of B+LNZ Genetics activities can be found in the B+LNZ annual report (PDF, 7.3MB).