Progress Report on the Primary Growth Partnership Passion2Profit Programme.
Sapere Research Group
The objective of this progress review is to provide the co-investors in the PGP with an independent assessment of how the programme is tracking towards its goals.
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Extract from Executive Summary:
Our analysis of the P2P PGP’s value drivers shows that most of the value was expected to come from increasing the volume of venison production. Prices were assumed to be static. The volume increase was to occur through a rise in hind herd numbers, an increase in average carcass weight, an increase in survival to slaughter and an increase in the average loin size driven by P2P initiatives.
Analysis of the P2P PGP’s strategy to reduce the proportion of production that was frozen, and switch 5 percent of this production to chilled, did not appear to be a significant value driver. This was because the increase in value from chilled exports was nearly offset by the decrease in frozen revenue.
While the direct returns of shifting production into chilled from frozen may not be great, the level of cooperation in the venison market achieved by the P2P PGP exceeds other sectors in the meat industry. The ‘marketing premium venison’ arm of the PGP has resulted in market development for Cervena in the Benelux in particular that would have been much more difficult, if not impossible, without the PGP. However, the tight supply of venison has made it most unlikely the PGP will achieve its ambitious 2022 market targets.
The market led production arm of the P2P PGP has made real progress in a number of areas. The Advance Parties initiative to drive practice change and technology adoption has been particularly successful. Moreover in the last year and a half the APs have been widening the spread of knowledge from their activities by involvement in the regional workshops designed to reach out to other deer farmers.
Analysis suggests that genetics could fundamentally grow the deer sector’s productivity and there has been encouraging recent research by AgResearch into venison heritability. We see value in devoting more resources to unlocking this potential. But it has proved difficult. It may be wise to initially investigate why there has been such a gulf between users and nonusers and why non-users claim to want to know more but when it’s offered don’t seem motivated to attend workshops.
Access to experts or influential advisers, strategic feeding and initiatives aimed at improving animal health are important. Strategic feeding in particular has been a clear benefit to many AP members and will be driving material improvements in production as a direct result of this PGP. Because it drives production volume and quality it may merit greater funding than the 4 percent of the P2P 2017/18 budget that it has been allocated. Improving access to experts, regional workshops and encouraging animal health planning are building momentum as they have all started in earnest only in the last 18 months.
Overall, the governance and management of the P2P PGP are very capable and focused on results. The P2P has achieved its Output Logic Model short term outcomes for the period from the PGP’s beginning in mid-2015 to 2018. We do not believe that the P2P can claim benefits or losses from all changes in deer numbers as was implicit in the 2014 Business Plan. But an estimate of incremental revenue from the P2P PGP derived from changed feeding and animal health practices amongst AP members only gives an amount of $8.2 million. This is nearly double the P2P PGP’s aggregate expenditure as at the end of 2017. This suggests that the P2P could well be paying back its cash costs already.