Waitaki confident despite outlook

Press, 5 March 1982, Page 10

Waitaki confident despite outlook

The outlook for the meat industry in 1982 was not encouraging. Mr E. J. Neilson, chairman of directors of Waitaki N.Z. Refrigerating, Ltd, told the annual meeting in Oamaru yesterday. Last year there had been a record group net profit of SIB.BM, as reported in the annual report, a remarkable kill of 9.7 M sheep and lambs and a record 21 per cent dividend, he said. Such a kill could not be foreseen this year, he said.

There had been a lift in New Zealand lamb prices in Britain, bringing values there more in line with other markets; and variety meats, which had been in the doldrums. were also meeting a stronger demand. Then Mr Neilson turned to the United States, where the beef market continued to be depressed, he said, and it was therefore most difficult to show a profitable return on beef export trading.

The extreme wintery conditions in the Northern Hemisphere and the United States in particular had brought about an overall lower meat consumption, he said, resulting in not only limited demand for imported beef, but also New Zealand lamb.

When the general down-

turn of the United States economy and its high rate of unemployment were added, the outlook could not be encouraging. Up to the end of January the sheep and lamb kill at the company’s nine works was 12.8 per cent behind last year’s figure, Mr Neilson said, “but given sensible industrial relations," the difference should slowly get near the budgeted drop of 3 per cent.

The cattle kill was 27 per cent behind last year, significantly greater than the budgeted decrease of 14 per cent.

A marked increase in the ■kill of old ewes, especially in the southern plants should alleviate the end-of-season ewe glut. Mr Neilson had strong words about the supplementary minimum price scheme, which he was partly to blame for the slowness of the present season. The Wool Board had criticised the amount of short wool submitted for auction; and S.M.P.’s were also having an effect on the carcase because the same supplement was paid on all grades, which led to excessive distortions between them. “I do not criticise the Government for providing in-

centives for our farmers, butthis is really a new system of providing the farmers with an adequate income to compensate for the Government’s inability to control inflation,” Mr Neilson said. When the current S.M.P.’s were announced last May. farmers and businessmen set about capitalising the new prices. Some'farmers were capitalising on the artificial effect on values and selling their holdings at' prices beyond their wildest dreams. Unfortunately the values did not reflect the overseas returns for primary produce and were therefore built on false premises. Mr Neilson ended on a note of confidence. After quoting from a paragraph of the 1981-82 financial review, including ... “the company is possessed of the necessary expertise and depth of experience to meet these demands and, as demonstrated in the past, also has the strength and resiliency to succeed,” he said that the directors thought the shares were undervalued and that the overall results would continue to be favourable.