THE Australian Agricultural Co says there is no truth to an industry rumour that its Livingstone Beef processing plant near Darwin is paying ‘under-the-odds’ for slaughter cattle from the company’s own Northern Territory pastoral properties.

Managing director Jason Strong told Beef Central there was nothing behind a suggestion that AA Co’s pastoral division had been propping-up Livingstone financially, by consigning cattle at rates below what they would otherwise be worth on the open market.

Mr Strong expressed a degree of frustration, in what he saw as AA Co having to regularly defend itself against such rumours, given the investment the company had made in one of the most ‘positive developments seen in the north in decades.’

“We choose to move costs through the broader business – that’s our call – but they will all be reported separately anyway. But the company is very disciplined in the way that we manage the cost structure of the business, and are very conscious of how we record all of the true impacts of each component of the supply chain accurately,” he said.

Full year of reporting

This year for the first time, AA Co’s Northern Beef Group (principally, the Livingstone abattoir and nearby depot holding properties, Pell and Carbeen Park) will report a full-year’s trading, given that in the previous reporting period, the plant was still only getting on its feet.

AA Co’s annual general meeting this year is being held on July 14, with full-year results reported some time in May.

The Northern Beef Group will be reported separately in financial results, along with the company’s Grassfed and Grainfed production divisions.

Investors and stakeholders would get a clear view of Livingstone’s financial performance in reporting, Mr Strong said.

“Our interest in measuring the plant’s performance is very much on a cost of conversion basis,” he told Beef Central. “The actual cattle trades are somewhat separate to the plant operation,” he said.

“The vitally important part for how the plant performs is how efficiently it operates.”

Mr Strong said the company made a conscious decision in January to run smaller numbers through Livingstone for the first part of the wet season, to manage the potential weather events.

“We’ve opened up this year running consistently at 350 head per day, but there have been some bigger days where we have run larger lines,” he said.

Mr Strong said the plant had been running a full shift for close to 12 months now, although currently the chain was running slower, with lower manning levels on each shift. It ran at full single-shift built capacity of 500 head/day for periods towards the end of last year, however.

“There is no restriction at the plant level on what numbers we process,” Mr Strong said. “We’ll run through the numbers that suit us, and are most appropriate for the time of year in terms of cattle supply and margin – but it is our intention to get back to full single shifts this year, as the season progresses.”

He said the plant was currently processing AA Co’s own cattle, plus some bought slaughter cattle.

“We’re buying some external cattle at present. They are not super-cheap, but they are not particularly expensive, either – certainly nothing like the figures well above 200c/kg that have been talked about,” he said.

“It’s not as high as the live export prices out of Darwin, being a different category of animal, but it’s still awfully good money for cattle that previously did not have much of a market in northern Australia.”

“There’s been quite a few cows and bulls available in the north that Livingstone has been bidding on.  We’ve been successful on some, but have missed-out on others. We’re certainly finding enough supply at the moment, but are always keen to access more.”

Mr Strong said the over-arching message was that the company was still happy with how the Livingstone plant is progressing, and there had been no real constraints to its operations over the recent northern wet season. “It’s all been pretty positive,” he said.

Cow market in the north

Small numbers of cull cows have been included in live export consignments of heavy cattle to Vietnam out of the Port of Darwin during the past few months, Beef Central understands. Prices for cull cows ex Darwin around 190c/kg or better have been suggested over the past month or two.

Landmark Broome agent Andrew Stewart said AA Co had been ‘more than competitive’ on lines of cows offered out of his region recently.

It was not uncommon for large pastoral properties in the Kimberley to offer very large lines of cows (typically, anything from 2000-5000 head) by tender at the start of the season, and it had happened again this year.

Recent rain in Queensland had lifted competition for such cattle from restockers in Central and Northern Queensland, the NT and into South Australia, Mr Stewart said.

Provided Kimberley cows did not have too much age about them, they could make $800-$900 as PTICs, or typically 180c/kg or better. Southern processors in WA and SA had secured relatively few such cows so far this year, he said.

• AA Co’s annual general meeting this year is being held on July 14. Full year results will be out some time in May.