Price rises hit ANM’s meat processing arm

LOSSES in the meat division will not be counter-balanced by the increased profitability of the company’s mart business, Alan Craig, chief executive of farmers’ co-operative, ANM Group, warned in an end-of-year statement at the board’s annual pre-Christmas lunch.

It had been an “incredibly difficult” year and the company’s flagship meat company, Inverurie-based Scotch Premier Meat, had struggled to recover from retail customers the £250 per head – 27 per cent – increase in beef cattle prices.

Sheffield-based Yorkshire Premier Meat, which made a profit of £568,000 last year following a loss of £200,000 in 2009, had fared “pretty well” this year in coping with demands for keener prices and longer credit terms from their largest customer, the acquisition hungry Northern Foods.

“The last three years has seen the most significant movement in the price of our raw materials, eclipsing even the BSE crisis in 1996 and the foot-and-mouth disease crisis in 2001,” said Craig.

“The meat division will operate in a more cost and cash controlling environment in 2012 to bring the division back into profit.”

Efforts to reduce unit costs and improve margins by increasing throughput had seen turnover grow by £16 million and volume by 1600 tonnes.

“There is only a 1.5 per cent margin between back-slapping profit and head-hanging loss,” said Craig.

He was speaking following the announcement that meat division managing director, David Fleetwood, has resigned after only 18 months to take up a position with an Irish-based meat company.

Craig said the marts division, Aberdeen and Northern Marts, had conversely benefited from higher livestock prices with a 6 per cent increase in the number of cattle and sheep sold and a £13 million increase in value.

The group as a whole recorded a profit of £1.027 million in 2010 following a loss of £311,000 the previous year. The company’s accounts for 2011 will be released in March.