Alliance Group’s willingness to accept additional livestock from farmers during drought conditions underlined the value of a cooperative, farmer-shareholders were told at the company’s annual meeting in Oamaru today.
Murray Taggart, chair of Alliance Group, said dry conditions in 2015 saw killing space at a premium at the same time as weak global market conditions made surplus kill unattractive.
“The strength of our balance sheet enabled the co-operative to absorb the additional kill and the associated marketing risk so we could support our farmers through the drought.
“Similarly later in the winter, when other processors effectively pulled out of the procurement market, Alliance was there to kill dry ewes to relieve pressure on farm.
“Alliance was originally conceived in response to farmers’ inability to have their stock killed in a timely fashion so it’s fitting we’re still meeting their same needs more than 60 years later.”
Taggart said that it had been a disappointing start to the new 2016 season with continued
dry conditions and weak international prices placing pressure on farmer shareholders and the co-operative.
“While these events are beyond our control, we need to ensure that Alliance’s performance within this environment meets our farmers’ expectations.”
The ongoing implementation of the co-operative’s business strategy will mean Alliance Group will be a vastly different company in the years ahead, said Taggart.
“Alliance Group is focused on improved performance, profitability and building a better business which is capable of delivering greater returns to our farmer-shareholders.
“We know we have to earn farmers’ support by meeting their performance expectations. The foundations laid this year will ensure a successful future for Alliance as the only 100 percent farmer-owned major red meat cooperative.”
David Surveyor, chief executive of Alliance, said the cooperative experienced a stronger performance in the second half of the year thanks to better operational efficiency, improved inventory management and the implementation of the strategy.
The start of the new processing season has been difficult and many farmers were facing the additional challenge of managing stock through the drier conditions, Surveyor said.
“Customer markets are challenging and that’s been reflected in the weaker prices in recent weeks and we’re working hard on a range of ways to try and increase farmer returns.”
The market is expected to remain slow in the coming months with weakening global mutton and lamb prices, he said. The New Zealand dollar was also having a significant impact upon schedule pricing.
“Implementing our strategy is now more important than ever. We’re focused on improving health and safety, meeting our co-operative principles, building organisational capacity, lowering our costs, strengthening our farmer supply, capturing more market value and transforming the shape of our business.”
The successful candidates to fill two vacancies on the board of Alliance Group are Jared Collie of Dipton and Jason Miller of Southdown. Fifty per cent (50 percent) of eligible votes were exercised in the directors’ election (2014 – 63 percent; 2013 – 49 percent).
The new directors will replace Doug Brown and Murray Donald who retired by rotation and did not seek re-election.
Name – Votes
Mark Adams – 10,398,692
Stuart Baird – 7,063,236
Gray Baldwin – 6,910,527
Jared Collie – 17,102,223
Jason Miller – 14,313,800
Ike Williams – 7,082,536
The unsuccessful candidates were Mark Adams of Fairlie, Ike Williams of Pleasant Point, Stuart Baird of Winton and Gray Baldwin of Putaruru.