Alliance Group has posted a loss before tax of $97.9 million for the financial year ending September 30 on a turnover of $2 billion.
Chairman Murray Taggart said the past year had been extremely difficult for the company and farmers.
This year was the 75th anniversary of the formation of Alliance but it had not been a year to celebrate.
On the previous financial year, the company made a $116 million profit on a turnover of $2.2 billion.
‘‘This year’s loss is very disappointing, coming off last year’s record financial result. The board and management have undertaken a comprehensive review of the business and we are taking steps to get the co-operative back on track to profitability. While it is early days, initial trading this financial year is tracking to expectations.
"Like all New Zealand red meat processors, Alliance faced significant volatility as a result of geopolitical tensions, labour constraints, inflationary pressures and weakening global markets.
"Prices in our key global markets began falling steeply through the October-December 2022 period and remained weaker for the remainder of the financial year, compressing margins."
The global market price for lamb fell almost 25% in two weeks in October, he said.
As a result, the co-operative recorded a significant decline in inventory value between October and December 2022, driven by the challenging global markets.
"China, our largest export market by value and volume, has yet to bounce back after the Covid-19 pandemic. Globally, high interest rates and inflation eroded consumers’ discretionary spending. Fewer people dined in restaurants, and more people swapped higher-priced red meat proteins such as lamb for less expensive white meats in their weekly grocery shop.
"There were also high levels of inventory across all proteins in various markets, particularly lower-cost Australian sheepmeat, which drove pricing down."
Chief executive Willie Wiese said the co-operative was confident in its long-term strategy.
"We have made changes across the business in response to the tough trading environment. These conditions have highlighted significant opportunities for improvement. Solutions, ingredients and materials remain a key focus and we have identified opportunities to create greater market value in 2024 and beyond."
Alliance Group continues to invest significantly in its plant network including the completion of a $16 million warehouse automation project at the Lorneville plant in Southland.