Meat co-op seeks capital from farmer shareholders
Meat processor Alliance Group is asking farmer shareholders to inject more capital in order to remain a 100% co-operative.
Meat processor and exporter Alliance Group concedes it is facing tough global market conditions with both weaker demand and pricing.
In its latest newsletter to supplier/shareholders, chief executive Willie Wiese says, like all red meat exporters, Alliance's livestock pricing reflects what prices it can capture in global markets.
"Weaker market conditions are being driven by persistently high inflation levels reducing consumers' discretionary spending," he told suppliers. "This has led to a decline in people eating out in restaurants and some shoppers trading down from higher priced red meat proteins - such as lamb - in their weekly grocery shops."
Wiese added there were also consistently high levels of inventory across all proteins in various markets, which is driving down demand and the price for fresh product. However, he says Alliance's inventory is on a par with levels in previous years.
"The Chinese economy is recovering slower than anticipated following Covid-19 and consumers there are more cautious with their spending," Wiese explains. "Recent information out of China suggests the current slowdown in demand will continue through the short to medium term, which has led to us diversifying some products into other markets."
He adds that the situation is also compounded by Australia producing increased volumes of sheep meat and beef.
"We are doing everything we can to mitigate the pricing volatility by re-directing product away from China into other markets," Wiese told suppliers. "We are also ramping up capacity for our farmers as we head into a busy processing period for lambs and non-replacement calves."
Farmer-led charity, Meat the Need is calling for donations to enable it to supply more meals to families in need.
Weaker pricing and demand from China continue to impact New Zealand red meat export earnings.
Fonterra has cemented its position as the country’s number one cheesemaker by picking up nine NZ Champion of Cheese trophies this year.
New Zealand dairy processors are welcoming the Government’s commitment to continuing to push for Canada to honour its trade commitments.
An educational programme, set up by Beef + Land New Zealand, to connect farmers virtually with primary and intermediate school students has reported the successful completion of its second year.
Horticulture NZ chief executive Nadine Tunley will step down in August.
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