SFF joins the slaughter
Meat processor and exporter Silver Fern Farms Ltd has joined fellow South Island-based meat company Alliance Group in reporting a big loss for the past year.
SFF’s deal with Shanghai Maling will come into force on January 4 next year, when the company will receive a $261 million cash injection from its Chinese partner.
“We have no desire to start a procurement war,” Hewett says. “It would be irresponsible use of funds.”
However, like his Alliance counterpart, Hewett admits if a procurement war does flare up this coming season the company is now better prepared for it.
“SFF now has a balance sheet that can withstand pressure in that space if we need to.”
Meanwhile, Hewett says farmgate returns need to link with in-market returns and he concedes that it is “challenging” at the moment.
“It is fair to say that since I joined the board this is the most uncertain outlook I’ve seen for all species except venison.”
He says the impact of the strong kiwi dollar is harming export returns.
“We’ve seen a 15-25% move against the euro, sterling and US dollar in the last 12 months.
“However, in-market prices are roughly the same and processors are currently wearing this. This has not come home to farmers yet.”
Hewett says the company has not yet settled on new season pricing. “It’s very challenging and we’re still working out where it’s going to be.”
