Processing

Supply, $A behind Casino Meat Cooperative loss

James Nason, November 9, 2011

The drenched start to 2011 and a high Australian dollar have been identified as key factors behind the $1.03 million after tax loss for 2010-11 anounced by the Northern Cooperative Meat Company at Casino earlier this week.

CEO Gary Burridge told Beef Central this morning that the impact of climatic conditions on cattle availability had placed signficant pressure on the business in the third quarter of the financial year. 

"Our peak period of production is January through to June 30, and obviously losing three months in the middle of the year places challenges in the production period that are difficult to recover from,” Mr Burridge said.

“The meat processing industry isn’t profitable every day of the week, it would be wonderful if it was, but your fixed costs are so high and a lack of livestock can certainly create a number of challenges for you.”

The high Australia dollar had added to the squeeze, he said.

“A dollar escalating 26pc and cattle prices remaining the same, you don’t need to be Einstein to say that something has to give in the middle,” he said.

Mr Burridge also announced at Monday’s annual general meeting that he plans to stand down in April next year after more than 18 years in the job.

NCMC chairman George Bennett told the meeting that Mr Burridge’s skill set and experience would be “sadly missed”.

As a registered cooperative, the Northern Cooperative Meat Company has similar reporting obligations to a publicly listed company and, unlike most other meat processors in Australia, is required to publicly disclose its end-of-year results.

Last year the cooperative announced a $1.025 million after tax profit.

The NCMC is owned by 1650 members, who are predominantly cattle and pig producers.

Despite its cooperative status, the meat processing plant receives no guarantees of livestock supply from members and competes with other processors for throughput.

It is supplied predominantly by independent parties who use the company’s processing facility for service kills.

“Obviously with trading conditions getting particularly difficult, they slow down their production, and if they can’t compete in the market and buy livestock, it obviously impacts on us,” Mr Burridge said.

 

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