THE NORTH CANTERBURY SHEEPFARMERS' CO-OPERATIVE FREEZING EXPORT AND AGENCY COMPANY, LIMITED

Press, Volume CIV, Issue 30939, 21 December 1965, Page 29

THE NORTH CANTERBURY SHEEPFARMERS' CO-OPERATIVE FREEZING EXPORT AND AGENCY COMPANY, LIMITED

The Fiftieth Annual General Meeting of Shareholders was held in the < hamber of Commerce Library, Christchurch, on Tuesday, 14th December, 1965.

The Chairman, Mr 1. A. Hart, presided over a small attendance. In moving the adoption of the Annual Report and Accounts, the Chairman said:

The 1964-65 season again saw record killings at Kaiapoi. The fairly mild winter was followed by a very dry spring in all the Canterbury districts as well as Marlborough. with the result that farmers in general were faced with a shortage of feed almost right from the start. Killing began in the week before Labour Day and within 2 weeks both chains were operating at full capacity. As a result of satisfactory negotiations with the Canterbury Executive of the Union, increases in daily killing capacities were agreed on for all Canterbury sheds. Our daily increase at Kaiapoi. was 600, equal to 12 per cent, and this higher daily kill was commenced on November 11th.

While the drought continued first preference had to be given to lambs, but it was not long before many farmers were becoming anxious to lighten up on their older ewes in an effort to conserve the remaining feed supplies. The previous year had seen a very large number of sheep killed throughout the district and it had not originally been expected that the sheep kill would increase in 1964-65, but the drought changed that pattern and we handled more sheep last year than the previous year. Naturally enough the condition of these older ewes was not very good and there was a large percentage of rejects and condemnations.

The lamb kill increased by nearly 4 per cent and the sheep by 13 per cent, giving an overall increase of 5j per cent. .SCHEDULES:

The lamb schedule opened at 21id. for the prime lambs under 281b5., to which was added a premium of 2d per lb. This premium was very soon incorporated into the schedule and was not removed after the early shipments were made, as had usually been the case with premiums in past seasons. This inflated schedule price no doubt encouraged early killings of lighter lambs and may have been required in other New Zealand districts to get stock into the works, but as far as Canterbury was concerned the lambs would have come in, premium or no premium, because of the feed shortage. The opening schedule represented an increase of 3d. per lb. over the opening price of the previous year. Because of this higher price there was not much enquiry by farmers wishing to ship on their own account at this time. The price increased to 25d on 11th January and remained there for two weeks when slight falls were registered of successive half-pennies over a period until 22nd February when it stabilised at 23jd again until sth April. From then on. increases in wool pullings helped to bring about a rise in value until the end of the season when the final schedule was 26jd.

The schedule for ewes opened up at the very high price of 10}d for the U/481bs. weight range, an increase of 3jd over the preceding year. In the light of sales of mutton later in the year, this excessively high price was not warranted and although eventually the schedule did come down to 9}d early in April, the reduction was too late, as with large ewe killings behind every one at this date, the damage bad already been done. I will cover this again in a later part of this report

SHEEP STATISTICS The difficult conditions in the autumn and winter were reflected in the drop in the lambing percentages. In Canterbury the over-all figure was just over 101 per cent which was a fall of 3 per cent over the previous year. Breeding ewes in the Canterbury land district rose by less than 100,000 at the 30th June, 1964, over the figures of the previous year. This was one of the smallest Increases recorded over recent years and was only li per cent Nevertheless the increase of 96.000 was the largest of the land districts In the South Island, Southland being next with 86,000. For many years the Nl. Meat Producers Board has published a table setting out the percentage of Export Lambs killed to Tailings. This percentage, they state, has risen from around 55 per cent to 60 per cent. If the targets set by the National Development programme are to be achieved, this percentage will have to drop to around 57 per cent, so it would seem that killings of lamb will have to stabilise over the next few y ears, to permit the build-up of flocks. EXPORT KILLINGS

Total killings of all classes of meat amounted to 524.000 tons, a decrease of 17,000 ions as compared with the 1963-64 figures. Lamb carcases were 166.000 down, the bulk of this drop being in the North Island. Wether and Ewe killings in the North Island were also down, but the kill of Ewes in the South Island showed an increase of nearly 450,000. The adverse weather conditions resulted in a decrease in the average weight of Lamb carcases kil--1 led in the Canterbury district of IJlbs. To the end of September. 1965, shipments of all classes of meat to the United Kingdom at 331.0Q0 tons was only 6000 tons less than the previous year, but shipments to destinations other than the United Kingdom fell from 160,000 tons to 126.000 tons. Of this decrease MOO tons less was exported to Japan >n Ewe mutton, while East Coast of America fell by

19,000 tons and the West Coast of America feU by 6000 tons. This decrease of 25,000 tons to America comprised mainly Boneless Beef and Veal. Although the figures to the end of September showed such a big drop in shipments to Japan, there have been large quantities sold which will not all be shipped until January, 1966, a direct consequence of the over-buying in 1963-64. We continued to put aside carcase Lamb for the Meat Development Co. for shipment to Canada, and the bulk of our Ewe Mutton was sold to Japan this past season. SMITHFIELD MARKET: The main shipments of early Lambs from New Zealand were marketed early in January and the ex hooks Price opened up at 33|d. This was in line with the bouyant market which bad been established in the latter part of 1964, but unfortunately this initial price did not survive for long. There was a steadydecline week by week through to the middle of March when prices had dropped by 7d per lb. During this period our buying schedule had actually increased at one stage by IJd per lb., before returning to the opening value again. One of the disturbing features has been the large amount of meat held in store in the United Kingdom this year, as compared with the previous year. From the end of February a build-up began and the tonnage of lamb in store rose at the end of May to 57,000 tons, some 21,000 tons more than at the corresponding date twelve months prior, and there is no doubt that this accumulation had a i depressing effect on prices. ■ For quite a long period the F.A.Q. quality lambs, especially those under 281b5., have been bringing the same price as their prime counterparts and this equality has been reflected In the opening schedule being paid here for the 1965-66 reason. JAPANESE MARKET: In the second half of 1964 imports of meat into Japan

rose sharply and it became , evident that the quantities held in store there were , greatly in excess of their , immediate requirements. : During this period, probably j due to speculation by some Japanese importers, the ' prices received for our New , Zealand mutton had steadily < risen for the meat which comprised the balance of the 1963- j 64 production. It is interesting to note that in 1964 , Japan purchased some 25,000 ( tons of horse meat in bone- j less form when the normal . consumption is about 10 to ] 12,000 tons annually, and at , the beginning of January this year, this surplus of 12,000 . tons was still in store there. ] Large quantities of Ewe mut- ■ ton were held too, and as the ■ prices paid for this had been ■ higher than the Japanese , market could absorb, large . losses were borne by the ori- j ginal Japanese purchasers, , whether broker, importer or ' actual processor. As a result j the quantity of mutton likely , to be sought by the Japanese , in the early part of 1965 fell i away considerably, and a , determined effort was made , by the Japanese to get their ] prices down to more realistic , levels. Sales were difficult to make and shipment was ask- - ed for many months later , than in the previous year. , The scare which occurred at ■ the end of August over the j discovery of Salmonella infec- j tion in some shipments of , Argentine boneless horse meat encouraged more pur- ■ chasing from the Japanese ] who had to replace the ton- ; nage of horse meat refused , entry by other meats, and 1 from that date fairly large quantities of N.Z. mutton have been sold at improved prices. Shipment, of course, has not been required immediately and in our case the balance of our sales to Japan will not be shipped until early January. With such a large percentage of our NJ!. mutton being ( sold each year to Japan, it is far better that we should have regular monthly sales and shipments to meet their requirements, and establish stable values for our exports. The over-buying and competition among the Japanese in 1964 caused the increase in prices at that time, but there is no doubt that it was directly responsible for the restrictions faced by us in New Zealand this year which made trading operations very difficult At the present time prospects for the sale of 1965-66 season mutton appear to be on a much sounder basis. GRADING: A preliminary report issued by the committee appointed by the NX Meat Producers Board indicates that the word "DOWN” will be eliminated from the.grading list The South Island companies pro- : tested strongly over the proposal to have “DOWN” grades in the South Island and it is pleasing to note that our objections appear to have been accepted by the Meat Grading Committee. No alteration, of course, to present grading standards will be made this current season, and , before the recommendations ; are accepted by the NX Meat Producers Board ft is their Intention to discuss the report with the Freezing Companies. OWN ACCOUNT SHIPMENTS: As mentioned earlier in this i report, when the schedule < opened at such an attractive i price there was not much in- 1 terest shown by fanners wish-i ing to ship on owners* i account Later in the year i when the schedule was re-' duced. there was a larger vol-1 ume of clients* killing, but the i total number handled was I well down on the previous 1

year, showing a decrease of 40 per cent With the somewhat uneasy state of the wool market over recent months, all the wool shipped on behalf of clients had not been sold, but it is hoped to clean up the consignments fairly soon. WORKS ALTERATIONS: The moving tables installed last year for the examination of the viscera have worked very satisfactorily indeed and the new Smallgoods room was a big improvement in the handling of offals. For this season, moving legging tables have been installed, improvements to the hot water supply to the slaughterboard have been made, and the yards have been roofed to comply with the requirements of the Department of Agriculture. A new machine for printing the stockinette meat wraps has been installed, and new amenities for the Tallow and Manure Department are in use. The installation of the moving legging tables Involved a major alteration to the layout in the slaughterhouse and our grateful thanks must go to the Chief Engineer and his staff for the excellent job they have done, which involved many long hours of overtime to make sure it was ready when required for the opening of the season. The Anderson Wool Dryer, installed in 1922, was found to be in poor condition when made ready for its annual overhaul at the end of the season. It was decided to replace it with a new Drum Type Dryer and although the manufacturers in Australia were able to keep fairly close to their estimated delivery date, the arrival of the carrying vessel coincided with the congestion of cargo at Lyttelton towards the end of October and it took over 3 weeks for the equipment to reach Kaiapoi from the port In the Engine Room, an extra Fuller Rotary Booster has been installed and two more Ammonia Compressors are due to arrive shortly. When all this equipment is installed our refrigeration capacity should be sufficient for some considerable time.

BALANCE SHEET: Additions to Buildings and Plant came to £46,561 for the year. Depreciation written off amounted to £18.872, so that the net increase of Fixed Assets totalled £27,689. Over the last 9 years, £244,986 has been spent on additions to Fixed Assets. Sundry Debtors are some £20,000 above last year’s figure, brought about by an increase in funds standing to our credit with our agents in London not remitted at Balance Date. Stocks and Materials are much on a par with last year. On the other side of the Balance Sheet you will notice that a new item appears—the Term Liability Loan to the Bank of New South Wales. You may remember that I mentioned in last year’s report that the Meat Board had been discussing with the Reserve Bank proposals to assist companies to finance the heavy expenditure caused by the hygiene regulations. This sum of £48,000 represents the amount we have estimated will be required to meet those requirements. The Tenn Liability has to be repaid by annual instalments over a period of ten years. Naturally this has jfduced the amount of our Bmer indebtedness on open account with the Bank. The increase in Sundry Creditors has been caused mainly by moneys deposited at call with the Company. Net Profit has fallen by £475. Shareholders’ Funds have grown by approximately £5400 during the year. STAFF: I would like to thank all sections of the staff for their co-operation in handling the record kill. The dry conditions certainly put the pressure on over a long period, and it was only the united effort on the part of all employees that enabled a steady flow of killings to be maintained. All sections, buyers office, works staff, engineers and maintenance staff are to be congratulated on their achievement. During the year Mr A. P. Bruce resigned from the Board after 33 years service, 3 of which he served as Chairman. Mr Bruce joined the Directorate in 1932, at a time when the company was in grave difficulties, and I would like to pay a sincere tribute to him for all the effort and time he has given on behalf of Shareholders over the years. He was replaced by Mr G. C. Weston. I have much pleasure in moving the adoption of the Report and Balance Sheet, which embodies Directors* recommendations for the transfer of £7,000 to the General Reserve and payment of a dividend of 5) per cent on the Preference Shares and 6 per cent on the Ordinary Shares. After the motion has been seconded by the DeputyChairman, Mr H. J Mclntosh, the accounts and report will be open for discussion. Mr H. J. Mclntosh in seconding the motion said: Mr Chairman, I would like to congratulate you on the scope of your report which has covered many points of vital interest to the industry. I have comments to make on two subjects, one of which you have mentioned in your report and the other on a different topic. The first concerns the market for our Ewe Mutton in Japan. From the 1963/64 season’s production, 25 per cent went to the United Kingdom, and 75 per cent to other markets. Japan took two-thirds of this quantity, - or in other words 50 per cent of the total output. Final figures for 1964/65 will not be available for seme time yet, as you mentioned in your report that it will probably be January before all our sales from

Kaiapoi will be shipped and there must be other works in a similar position. Nevertheless from the figures available up to the end of September, I would think the pattern will be much the same as for the previous year—probably half or a little more than half of our total ewe carcases finding their way to Japan. You mentioned the drop In prices which had been paid by Japan, but even so, these prices were higher than could be obtained from the United Kingdom. It is obvious that Japan must continue to be New Zealand’s largest customer for Ewe Mutton and it is essential that we do not push our prices up to such a level that will make them look for other sources of supply. We have seen the effects of substitute materials on our wool prices. We do not want to see substitution of supply of Ewe Mutton on the Japanese Market. The other point I wish to make concerns the over fat lamb, -which by regulation from the New Zealand Meat Producers’ Board must not be included in our export grades. Last year, due to drought conditions in the district, lambs were lighter than usual and the problem was not very large. This year with ample feed available all works have been faced with the very difficult task of trying to ensure that these overfat carcases are kept aside and will not finish up in the export grades. In past seasons when feed has been short and pressure for killing has been high, the statement has often been made that our light lambs must be killed as and when they are ready—that any delay in killing after that point results in deterioration and consequent down grading. This season, because there is so much feed around many termers are not drafting for the lighter lamb when it is ready, and have delayed killing in order to put more weight on their lambs. Members and officers of the Meat Board have advocated for several years past the necessity to draft earlier and at more frequent intervals than formerly so that there is less likelihood of getting these overflats. Experience so far this season confirms the truth of the Meat Board’s suggestions. At Kaiapoi and also at the other works, killing was slow in the first three or four weeks and yet now we are killing lines which contain several overfat carcases. If these lambs had been drafted two or three weeks earlier I would venture tn say that there would have been very tew, if any, overfats. I know too that the drafters have had some difficulty in persuading farmers to draft, but if lambs are kept in order tn get a decent sized mob away at higher average weights then one must expect, especially in a season such as we are having this year, a percentage of overfat carcases. I realise that more frequent drafting means a lot more work for the farmer and the drafter, but th* is a problem w must afl face up to. Mr Chairman, I have much pleasure in seconding your motion for the adoption of the Annual Report and Accounts. 'The motion was then open for diacuseion, was put and cauiied. The Chairman reported that the retiring Directors, Messrs D. H. Butcher, P. L Burbury and G. C. Weston had signified their willingness to continue in office and there had been no other nomination. The retiring Directors were then re-appointed. Nd nomtaetton for tt position of Auditors had been received and therefore the present Auditors continued in office. Mr F. Bryden thanked the Direction for their work over the pant year and for the continuance of their policy of keeping the woria uptodate. TMs motion was carried by acdamation. The Chairman thanked all preßent for their confidence and there being no further burine* he , dedared the meeting dosed. At a subsequent meeting of Dfrecten, Mr I. A. Hart and Mr H. J. Mclntosh were unanimously reelected as Chairman ’and. Deputy-Chairman respectively for the ensuing jw. . . < —PDA.