The North Canterbury Sheepfarmers’ Co-operative Freezing, Export and Agency Company, Ltd.

Press, Volume CVIII, Issue 31862, 14 December 1968, Page 22

The North Canterbury Sheepfarmers’ Co-operative Freezing, Export and Agency Company, Ltd.

THE FIFTY-THIRD ANNUAL GENERAL MEETING OF SHAREHOLDERS WAS HELD IN THE CHAMBER OF COMMERCE LIBRARY, CHRISTCHURCH, ON TUESDAY, DECEMBER 10, 1968. The Chairman, Mr I. A. Hart, presided over a small attendance. In moving the adoption of the Annual Report and Accounts the Chairman said:

Last year When we met at the Annual Meeting it was ! very shortly after devalua- ’ tion had taken place both in ' New Zealand and the United i Kingdom. At that time it was . difficult to forecast what i effect this would have on our ’ prices in overseas markets J but you will remember that ' immediately following de-' valuation a retrospective ■ increase to the beginning of ' the season was made by exporters to, the schedules previously announced. ' At about the same time there was a strike by dock 1 workers in the United King- ' dom which caused a tempo- ' rary shortage on the Smith- ’ field market, but even more important was the complete ■ ban on meat products from ' South America following the ; disastrous outbreak of Foot: and Mouth disease in Eng- i land. Although the ban was ’ subsequently lifted on Beef, j it still applies to mutton and lamb. A rise in Pelt Prices ' also contributed to a general , strengthening of the schedule ' and in the long run producers j fared far better than was at j first indicated when the ( schedules were announced at; the beginning of the season. , In the previous season a j change had been made from , the customary overall sche- . dule for lambs to one of payment for bare meat plus the pelt, with wool being credited to each line as a separate payment. For this past season this system was again modified to provide a basic schedule for bare meat only, with the payment for skins, that is, a combined value for wool and pelt being shown as a separate item. In addition, following requests from Federated Farmers to bring the South Island basic schedule into line with the North Island a change was made based on delivery of stock for killing to the nearest ‘port’ works. The producer thus pays transport from farm to the nearest freezing works plus the cost of railage from the nearest freezing works to the nearest ‘port’ works. To offset this extra cost, South Island exporters paid the same basic schedule as in the North Island, whereas hitherto the South had been on a lower basis than the North. This past season also saw the introduction of the OMEGA grade. In the North Island the percentage of OMEGA D’s and 2’s was very low, and while in the South Island as a whole, the figure was less than 2" of the prime D’s and 2’s, it would be true to say that the percentages lin the Canterbury District I would be the highest in New Zealand. Tie wide variations in Canterbury breeds, plus seasonal fattening conditions, are probably the reasons for this higher proportion. In the early part of the year, with only small arrivals of ; these OMEGA grades on a rather depleted Smithfield market there was only a small discount in prices, but later on, with larger quantities being marketed, the gap widened to between 3d and 4d per lb. Due to the poor spring feed position in many parts of Canterbury lambs did not come forward very quickly at tlie beginning of the year and in fact our Lamb killings to Christmas were slightly below those of the previous year. After the Christmas break, killings improved although average weights were down about Ulbs per carcase for the whole season. The effect of the Australian drought on our sale of Ewe Mutton to Japan is now common knowledge and the pressure it placed on storage capacity throughout New Zealand. At Kaiapoi we were perhaps in a better position than some others as regards storage and we did not have to curtail our intake of sheep. However, our larger kill of ewes has brought along its problems as we are now holding in store a greater quantity of mutton than we had a year ago. All but a very small quantity has been sold to Japan but it is not expected to be shipped completely until January or February. SCHEDULES: Due to the change in the basic schedule for lambs, comparisons with the previous year are not of much benefit. Skin prices improved during the season from 98 cents for a 21b wool pull to 130 cents by the time the season ended. The price for a Grade 2 lamb after the variations due to devaluation was 12.3 cents in late November rising gradually to 14.4 on January 22 then falling fairly steadily to 12.9 cents by the beginning of March with a further drop to 12.4 cents in early May, at which level it remained for the rest of the season. The ewe schedule settled at 6.5 cents after devaluation, dropped a half cent on March 4 and rose again to 6.5 cents on May 13.

MARKETS: When new season's meat arrived at Smithfield the prices realised over the first two months were the highest since meat was released from Bulk Buying control in 1954. This was due to the low stocks on hand and the ban on imports from certain suppliers brought about by the foot and mouth disease outbreak. In January

the price of a 29/36 Prime lamb was 2/Bjd compared with 2/4jd the year before. The downward graph line of lamb prices at the end of January and through February was almost parallel with those of previous years, followed by the customary levelling off during March. The price fluctuated between 2/2d and 2/4d during the next three months and then began to rise weekly from late August until, at November 1, it reached 2/7jd.

As mentioned earlier, the market for ewe mutton for Japan has been greatly influenced by the large volume of Australian production as a result of the drought experienced there, coupled with the increase in our own killings. Early sales were made at around 101 cents but this price dropped to 71 cents for later sales. In previous seasons the Japanese have begun taking delivery from January but this year it was May before any sizeable quantities were loaded. There was a better demand from the United Kingdom for the heavier grades of ewes which was very fortunate as the Japanese have confined their purchases fairly strictly to the lighter weights.

DIVERSIFICATION: As a direct result of the prohibition of exports from South American producers to the United Kingdom, these countries were obliged to find other buyers. Much of this meat was sold in the Mediterranean area at prices substantially lower than could be obtained at Smithfield. Whereas in the previous year we had sold fairly large quantities to Greece, we found competition there this year very hard. With an increase from 10% to 12% required by the N.Z. Meat Producers Board, and our own increased lamb production, our diversification percentage was lower than last year, although our total sales of Lamb to markets outside the United Kingdom was slightly up. This coming season we intend to do cutting of lamb mainly for the Meat Export Development Co, for their United States and Canadian requirements and we hope this will enable a larger tonnage of meat to be diverted. For this season the percentage required is 15%. EXPORT KILLINGS:

Total killings of all classes of meat for the export year ended 30th September 1968 increased by almost 75,000 tons, being comprised of 17,000 tons Lamb, 23,000 tons Mutton. 28,000 tons of Beef and 5000 tons of Offal. Shipments for the same period were 42,000 tons higher which means that there was in store in New Zealand some 33.000 tons more than last year.

At Kaiapoi we again established a new record of killings with a total kill of over 735,000. The lamb kill increased by 8%, sheep by 34% with an overall increase of 12%. It would be fair to say that part of the substantial increase in sheep killings Was the result of congestion of storage facilities throughout the district. OWN ACCOUNT SHIPMENTS:

Although we had a regular number of clients shipping on their own account total numbers of stock so treated were • substantially down on the record of the previous year. It was noticeable that the bulk of the quantity shipped on own account was for the first two vessels loading at the beginning of the season. The realisation from these early vessels were very good, but later shipments did not fare quite so well. WORKS IMPROVEMENTS:

The new Pelt House operated from the beginning of the season, and the results were fully up to expectations. The Conditioning and Ageing Rooms operated from early in January and the experience gained will be valuable this season for the quantities we intend to cut for the North American market. The biggest job this year has been the extension to the Slaughterboard and the installation of the third chain. >This third chain plus the lengthening of the two existing chains we estimate will provide ultimately for a daily kill of 9200. At present this figure could not be handled in all the follow-on departments, where additional plant will be required before this maximum can be achieved. The extra we could handle above last year’s tally would be 1000 per day, but so far the increase is limited to 300. Although this increase is only nominal, the third chain is now in use. I have mentioned these figures because some publicity has previously appeared to the effect that Kaiapoi could handle 9200 per day. This is not the position at the present time —a figure of 6600 would be more realistic, but the planning which has been done over the last few years has always been done with a target of over 9000 daily kill, and our facilities will be expanded from time to time to keep in step with increased farm production. As mentioned previously : facilities have now been i installed to enable cutting of

lamb. With the introduction of the two OMEGA grades the capacity of the accounting machine was insufficient for our purposes and was replaced by a new Computer machine, which also copes with the Wages and other records.

Although we managed to get through the year with a minimum of trouble over storage of meat, it has been decided to provide more storage space, including a third Blast Freezer. Construction is to take place during this coming season, but the extra capacity will not be available until the 1969/70 season. When this is completed, the next stage will be conversion of the Old direct expansion freezing rooms in the original freezer block to a large storage area. These plans will eventually provide for storage for an additional 110,000 carcases of Lamb. BALANCE SHEET:

During the year the Uncalled Ordinary Capital was called up and qualifies for dividend as from Ist July, 1968. Additions to Buildings amounted to $34,000, the bulk being the extension to the Slaughterboard. Additions to Plant came to $63,000 which covered the balance of equipment required in the Pelt Department, the Cutting Room, for the additional Chain and the new Computer. Depreciation written off totalled $BO,OOO, nearly $20,000 more than last year. Higher rates of depreciation are allowed on the Pelt Building and Plant because of the acid conditions there, and this, together with Special Depreciation on much of the new Equipment installed over recent years, is the reason for the increase. The nett increase in Fixed Assets is around $17,000. Sundry Debtors are lower by $27,000 and stocks and Materials down by $126,000. Last year’s figures for stocks was much higher than usual due mainly to unsold stocks of Casings. This year we were able to dispose of all the current production plus the carry over from 1967. Further instalments have reduced the Hygiene Loan. The Bank Overdraft is on a par with last year, and Sundry Creditors are reduced by $193,000. Shareholders’ Funds increased by $68,500, made up of the additional Ordinary Capital of $43,500 and undistributed surplus profits of $25,000.

STAFF: Once again I wish to thank all sections of the staff for their co-operation throughout the year, and handling another record kill. This was only achieved by the combined efforts of the works seasonal staff, the permanent staff, buyers, office, engineers and maintenance workers and all are to be congratulated on their achievement. I have much pleasure in moving the adoption of the Report and Balance Sheet, which embodies Directors’ recommendation for the payment of a dividend of 51% per annum on the Preference Shares and 6% per annum on the Ordinary Shares. Mr P. I. Burbury, in seconding the motion, said that he could not add much to what the Chairman had covered in his report. He was concerned about the movement of large numbers of stock out of the Canterbury District The question of quotas on the killing capacity of Canterbury works was a difficult one to solve, but the cost of. the movement of stock was a cost which the producers had to pay in the long run. In reply to a question from Mr A. M. Henderson the Chairman said that although the works now had a killing capacity of 9200 per day. the ancillary services in some other departments could probably handle only 6600 per day without additional equipment. The present daily output, which included a halfhour’s overtime, was 6363.

There being no further discussion on the report and accounts, the motion for their adoption was put and carried. The Chairman reported that the retiring Directors, Messrs P. I. Burbury and G. C. Weston, had signified their willingness to continue in office, and that no other nominations had been received. The retiring Directors were then re-appointed. No nomination for the position of Auditors had been received and therefore the present Auditors, Messrs Hicks and Ainger, continued in office.

The Manager. Assistant Manager and Auditors were appointed to act as Scrutineers in the event of an election for Directors. Mr A. K. Johnson moved a vote of thanks to the Directors for their work during the year. Although the new basis of schedule payments with separate payment for skins must have created additional work, he was sure that this system would be an advantage to producers. The Chairman replied that although it had been necessary to have a man trained to make these skin appraisals he was confident that the new scheme had been fairly successful. On behalf of the Directors he thanked those present for the expression of confidence.

There being no further business he declared the meeting closed. At a subsequent meeting of Directors, Mr I. A. Hart and Mr P. I. Burbury were unanimously re-elected as Chairman and Deputy Chairman respectively for the ensuing year. —Advt. |