This loss, up from a $7.91 million deficit the previous year, is the most substantial during Simon Stahl’s tenure as the cooperative’s chief executive.
The primary reason for this loss has been attributed to record cattle prices, which were driven by a lack of cattle supply due to strong producer demand for restocker animals since 2020, following the last drought. The cooperative had anticipated these challenges, as forecasted during the previous year’s AGM.
Additionally, the cooperative faced challenges due to China’s suspension of its meat exports in May 2020 over a labelling issue. This suspension came at the beginning of the restocking process, causing a significant reduction in cattle supply for the cooperative. As a result, the plant operated below capacity, sometimes as low as 30%.
Supply chain costs also rose over the year, affecting all aspects of the business, from transport to chemicals used in tanning and cleaning processes.
Despite the challenges in beef processing, the co-op’s pork processing plant at Booyong, north of Lismore, managed to deliver a small profit. However, the tannery faced a difficult trading year due to decreased global demand for leather products.
Looking ahead, with the decline in cattle prices, the co-op’s outlook remains positive. Simon Stahl commented on the cyclical nature of the industry, noting that when cattle producers thrive, processors often face challenges and vice versa.