Meat company results only average for 2017 – will 2018 be any better?

June 11, 2018

ANZCO’s lacklustre result for 2017, posted last month, concludes the financial reporting for last year by the three major processors which publish their results. ANZCO’s pre-tax profit was $1.8 million which compares disappointingly with Alliance Group’s $16.7 million profit and Silver Fern Farms Cooperative’s 15 month profit of $7.8 million. Read the rest of this entry »

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Decision made, but important to find the cause

May 31, 2018

The Government decision to eradicate rather than contain Mp. Bovis has the merit of drawing a line under the first stage of the disease outbreak. There were three options under consideration: eradicate, manage or do nothing; the third was clearly not seriously considered, but there must have been a serious debate between the first two. In the end the eradication course of action was chosen because it gives ‘the best shot’ at eliminating the disease to the benefit of the New Zealand agricultural sector, particularly the dairy industry, and the economy. Read the rest of this entry »

South Island farmers still being short-changed

May 21, 2018

When it comes to being paid for their livestock, South Island farmers appear to be earning considerably less for some species than their North Island counterparts. Trying to unpick the reasons for the differential is complicated by a number of factors, like traditional meat company secrecy, schedule price as distinct from premiums paid for volume supply, cooperative pool payments and loyalty rewards, shorter seasons, cartage, labour agreements and relative plant efficiencies. Read the rest of this entry »

Silver Fern Farms’ result shows benefit of capital injection

April 6, 2018

Silver Fern Farms Limited has posted an improved annual result for its first year with its new Chinese partner, Shanghai Maling, which invested $260 million to acquire a 50% share of the meat processor and exporter. Revenue for the 2017 financial and calendar year, following the change in balance date from the traditional meat industry year to September, was on a par with 2016, but the NPAT of $15.4 million was a huge increase on the previous year’s $30.6 million loss, although not as good as the 2015 result of $24.6 million. Read the rest of this entry »

Doubtful Landcorp will ever deliver acceptable return

March 22, 2018

The latest half year result to 31 December gives rise to serious doubt whether Landcorp, or Pamu Farms as it now likes to be known, will ever justify the taxpayer investment in a national farming enterprise. Published after tax profit was $21.9 million compared to $37.9 million in 2016 on revenue which was 3% lower at $106.4 million, but the EBITDAR was actually a loss of $6.0 million against a $6.9 million profit the previous year. The main difference accounting for the apparent contrast was a livestock revaluation of $39 million. Read the rest of this entry »

Free trade trumps protectionism, we hope

March 22, 2018

It’s ironical the same week the CPTPP agreement was signed President Trump proudly announced new tariffs on steel and aluminium which threaten to undermine the World Trade Organisation’s function as the global regulator of international trade. The jury is still out on whether Trump can get the tariffs signed off by Congress and he has already created exemptions, at the time of writing for Australia, Canada and Mexico. But it’s an uneasy period, particularly for a country as dependent on trade for its economic survival as New Zealand, because we might well get caught in the crossfire from a trade war. Read the rest of this entry »

Meat companies must be clear about their purpose

March 7, 2018

When I heard KPMG’s global agribusiness head, Ian Proudfoot, on the radio stating the move away from meat to alternative proteins was happening permanently and quickly and meat companies needed to wake up, I wondered whether I had strayed into the Pop Up Globe to see A Midsummer Night’s Dream. Surely if meat companies need to wake up to alternative protein, this implies their whole business model is broken and farmers should be sitting in front of their horoscopes looking for a magical answer to the inevitable question “what the hell do I do now?” Read the rest of this entry »

How much meat do we actually eat?

February 21, 2018

“There are three kinds of lies: lies, damned lies and statistics” is a quotation which Mark Twain attributed to British Prime Minister, Benjamin Disraeli. Over a three week period the Sunday Star Times is conducting ‘an investigation into how environmental concerns are putting the heat on meat.’ Although much of the first article in the series was balanced and fair in its commentary, the main conclusion was clearly wrong, based as it was on misleading statistics published by the OECD. These appear to show a dramatic drop in the amount of red meat, particularly lamb and mutton, New Zealanders are eating. Read the rest of this entry »

Changing export markets give confidence in industry’s future

February 18, 2018

The global market for New Zealand’s meat exports and exporters is undergoing quite a rapid change, judging by movements in the industry’s latest quota entitlements and market destinations. The differences between exporters and markets over a ten and five year period provide an interesting snapshot of the relative position of the meat companies and the impact of changing market dynamics. Read the rest of this entry »

My tips for 2018

February 18, 2018

It’s the time of year for making predictions, some of which may turn out to be close to the mark, but most, like horse racing tips or economists’ forecasts, will end up looking slightly silly, if anybody takes the trouble to remember what they were. The luxury of writing a column is the ability to speculate without being held to account for any inaccuracies. Read the rest of this entry »