KEY POINTS:
When traces of the insecticide endosulfan were found on New Zealand meat sent to South Korea in 2005 the suspension of exports cost about $30 million.
This month it happened again.
South Korea is New Zealand's second biggest meat market worth $240 million last year and accounting for about 50,000 tonnes.
But a box of cheek meat weighing only 27.2kg has the industry holding its breath.
South Korea is waiting on a report from the New Zealand Food Safety Authority and is not taking any more beef from the processing plant where the box originated.
The authority is not naming the processor involved saying the issue is not related to actions at the plant but to those on a farm or farms.
How the insecticide - banned in more than 50 countries - got on to the meat is under investigation and it is not possible to say how long that will take.
Food Safety Authority senior programme manager market access Neil McLeod says there is currently a very narrow focus on a small number of farms.
"But if there's nothing clear from that investigation then there's no time scale," McLeod says.
"If there is something that leaps out as an abnormal use then we're very quickly on to a solution and it's too early to say which way it might go."
There have been no more discoveries of contaminated meat and the level that was found in the box of cheek meat is not a health risk issue, McLeod says.
Korean officials in the past have been seconded to the Food Safety Authority and so understand the systems here quite well, McLeod says.
When the authority makes its report, McLeod hopes it will be accepted and then decisions can be made on how to proceed.
"But that may not be the case and it certainly wasn't the case last time."
In 2005 Korea felt it had to come to New Zealand and do an audit of systems which took months to complete.
All hopes will be for a speedy resolution, especially after recent riots in South Korea caused by concern about mad cow disease after the government there agreed in April to resume imports of US beef.
Not an environment in which you want to be putting your hand up to supplying contaminated meat.
Federated Farmers Meat & Fibre chairman Bruce Wills says the situation is a huge concern.
"The first thing we've got to do is find out how it happened and why and put an end to it quick smart.
"If it is something where our members have been remiss or careless we will take that very seriously and make sure that things are put in place so it doesn't happen again."
Wills says 99.9 per cent of farmers will never have a problem because they take extraordinary precautions to ensure food safety.
"I'm hoping it was sort of unplanned and unintentional, I'm sure there was no intention with this thing at all," he says.
"We've got not only our meat to be concerned about for all farmers but just the reputation of New Zealand's clean, green image to preserve."
After the 2005 incident, Waimauku farmer Carl Houghton was fined $15,000 after he used the endosulfan plant pesticide as a non-approved spray on cattle.
In many respects farmers stand and fall together, which probably accounts for common use of co-operatives in the sector.
In most other industries a business that makes a mistake will hurt primarily itself and in most cases provide its competitors an opportunity to take advantage.
In farming the mistake of one farmer can hurt everyone and in respect to any potential export ban New Zealand is only as strong as its weakest link.
If the discovery of the insecticide on meat this month is a result of a gap in accepted practice or carelessness then the procedures, education and advice to farmers will need to be reviewed to plug the holes.
If it is found to be intentional misuse then the authorities need to make the message unmistakably clear - the livelihood of the wider farming community and the economy cannot be put at risk by reckless action.
* Public submissions on a preliminary decision by the Environmental Risk Management Authority to allow the continued use of endosulfan on plants closes on August 8.
MEATY DEAL
Meat processor co-operative Silver Fern Farms has discussed its plan to sell half the company to listed rural services company PGG Wrightson at 10 meetings in the South Island and is preparing for the next round of meetings in the North Island.
Silver Fern Farms chairman Eoin Garden says the company has been overwhelmed by the response.
"The shareholders [and] suppliers were coming to the meetings pretty sceptical I suppose or not knowing the extent of the deal, all the concerns about people saying we're going to lose control and we're selling half the company to somebody and all those issues," Garden says.
"When it was explained to them and at the end of the meeting they'd talk with us and a lot of guys said, 'You know I came to the meeting very dubious, now I understand, happy to support it'."
PGG Wrightson has agreed to buy 50 per cent of Silver Fern Farms for $220 million in a deal promoted as creating a supply chain stretching from the pasture to the plate and a platform for industry rationalisation and integration.
Garden says even the "hard nuts to crack" said they would think about the deal.
"So there was a quantum change in everybody's understanding," he says.
Silver Fern Farms needs 75 per cent approval from its co-operative shareholders at a vote expected to be held in September.
Meanwhile, Alliance chairman Owen Poole says the Southland-based co-operative had a board meeting last week at which discussions included strategic initiatives and the Silver Fern Farms plan. "I don't have any strong views about that, suffice to say that we have some reservations about it," Poole says.
Alliance's reservations included loss of farmer ownership and control, governance and the hybrid model.
Alliance has had experience of the hybrid model when in the early 90s the co-operative had Fressia Meat Holdings as a 37 per cent corporate investor.
"We certainly understand the tensions it creates between rewarding capital and rewarding farmers," Poole says.
Poole says he has had an unprecedented number of calls from Alliance shareholders with a central concern being a reluctance to give up farmers' ownership and control.
Alliance is working through its strategic options at the moment and expects to discuss the Silver Fern Farms plan with farmers during a series of meetings due in August, Poole says.
"There are elements of that plan as it stands that we're not attracted to."
BALLANCE GROWTH
Co-operative fertiliser maker Ballance Agri-Nutrients is expanding its market presence with plans to buy all of Summit Quinphos.
Ballance will pay an undisclosed sum to Japanese-based Sumitomo Corporation for the 60 per cent it does not already own of Summit Quinphos - which says it is the country's third biggest fertiliser company.
Ballance Chairman David Graham says Summit Quinphos has a strong, loyal following and Ballance is determined to ensure its unique identity and market positioning remain available.
"Summit Quinphos offers farmers real choice in terms of products and purchase arrangements, and we are committed to ensuring that this choice remains," Graham says.
"We anticipate the acquisition will provide synergy benefits in excess of $2 million a year, a welcome reduction in costs for farmers at a time when the price of fertiliser is under unprecedented pressures."
Summit Quinphos chairman Shinji Matsushita says Sumitomo has decided to refocus its attention on growth opportunities in Asia.
"We have had a long and productive relationship with Ballance at board level, and believe it is in the best long-term interest of staff, customers and business partners for Summit Quinphos to be more closely aligned to Ballance," Matsushita says.
The purchase is subject to the completion of due diligence.
