Casino’s Northern Co‐operative Meat Company Ltd has posted a $1.57 million profit before tax for the 2016 financial year, presenting that information to members at Monday’s Annual General Meeting.
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"This is a good result for the co‐operative when you consider throughput at our beef plant was down 37% on the previous, in fact one of the lowest numbers in some 15 years,” said re-elected chairman John Seccombe, now entering his second three-year term.
“The pleasing thing is after two years of record throughput due to the drought, we were expecting the downturn and reacted accordingly in terms of cost management,” Mr Seccombe said.
Last year’s record $26m profit combined with $23m from the previous year helped secure the future of the co-operative business, with $40m going towards new infrastructure including a boiler, cold storage, automated storage and retrieval and an upgrade of the beef floor.
On-going costs savings have helped buffer NCMC this financial year and it continues to look for new ways to save money, like growing its own biomass from effluent waste to make steam which runs the plant.
But the year ahead will prove challenging .
“There are so many factors at play,” said Mr Seccombe. “It is going to be difficult to predict the flow of cattle. It all depends on the weather and the season and how aggressive producers will be at restocking their herd.”
The current trend by producers towards turning off heavier steers, to get that weight and dollar gain, has somewhat changed the throughput of cattle making it even more of a challenge to predict what will come past the knocking box.
Mr Seccombe said the ability of NCMC to cater for the service killing of speciality Wagyu cattle had played an important role in keeping NCMC’s doors open, with up to 20 per cent of throughput credited to the high-marbling breed.
Processing Wagyu requires an extra 24 hours in the chiller to set the high proportion of internal marbling before boning and NCMC prides itself on being able to offer that service.
“Service kills are our bread and butter on the beef floor,” said Mr Seccombe. “We aim to attract and assist meat operators in their processing.”
Commenting on future veal production, Mr Seccombe “We have a dedicated veal chain and we want to maximise the efficiency of that by creating the pull through.”
“If we create a veal brand that has customer acceptance there will be significant benefits to our members.
“While we are pleased with the past year’s result, there is plenty of work to do as drought breaking rains encourages further herd re‐building over the coming period,” reminded Mr Seccombe.
“Again, as a farmer owned processor, we have the classic double edged sword. Cattle prices are in record territory which is great for our members but not so good for processing.
If the current lack of supply persists into 2018 Mr Seccombe acknowledges that some hard decision would have to be made.
“History shows that in such a situation abattoirs can be mothballed but we’re certainly not talking about that. We’ve been prudent on our costings and have run the plant as efficiently as possible.”
Another important strategic diversification of the Co‐operative was its pork processing business.
“Our pork processing division continues to grow and we are very committed to growing the industry,” Mr Seccomb said. “Pork has a very solid case for growth when you consider Australia is 10% behind processing levels prior to the pork profitability crisis of 2008/09.”
