The co-operative held 20 meetings across New Zealand to update farmers on its operation and the tour finished in Mossburn last night.
Group chief executive David Surveyor, speaking at Ranfurly Bowling Club last week, said the co-operative had a record profit performance for the year ending September 30.
"It’s the most profitable year in Alliance Group’s history."
Shareholders would get a profit distribution and bonus share issue this year.
"When the company does well, it gets to reward the farmers."
Alliance had spent up to $50 million on capital expenditure at its plants in the past year.
The Alliance board recently approved spending $8.5 million to increase beef capacity at Mataura plant to allow the processing of up to 23,000 more cattle.
Money would be spent on decarbonising the company by 77% by 2029 including a coal-fired boiler being replaced by two heat pumps at Mataura plant this financial year.
A heat pump was being installed in Pukeuri plant now, he said.
If they could get a boiler running on biofuel in Levin, they would float converting or replacing a coal-fired boiler at Pukeuri plant with a biofuel boiler.
Last year, Alliance set new records for revenue and the number of new shareholders — "about 365 farmers joining the family".
A new record was set for safety performance, the injury rate dropping to 14.8 per million hours worked.
"We are the safest red-meat company in New Zealand."
A record number of store animals — 1.3 million — had been moved on and off farms around New Zealand in the year, due to the impact of floods and droughts.
Shareholders were prioritised space in plants.
So far, about 70% of Alliance staff had been infected with Covid-19. He praised the staff being able to keep the plants running with reduced capacity during the pandemic, so farmers could continue to move stock off farm.
"Alliance was the only company which did not have to shut a plant during the peak of the pandemic."
To keep the plants running, some staff travelled for hours to work on other sites, such as staff flying from Levin to work at Some staff moved out of their family home to live in a hotel so they could continue to process livestock when their sick family had to isolate.
"I think that is absolutely amazing."
International Governments tightening monetary policy, such as increasing interest rates, was resulting in positive gains in foreign exchange rates for New Zealand exporters.
"That’s quite helpful."
A global labour shortage was an issue and Alliance needed more foreign workers to maximise the efficiency of its plants. Presently, Alliance was trying to recruit staff to run a seventh chain at Lorneville.
"If we can it will be available this year."
He believed a global recession was now more likely than first forecast.
"It feels much more like we will be coming in for more of a hard landing."
Consequently, international consumers were eating out less and bypassing a rack of lamb to buy mince or a cheaper white meat.
"That’s a real challenge for us."
Cost increases would squeeze profitability by up to $40 million for the co-operative.
Chairman Murray Taggart said there were increasing levels of market volatility across the world. Economic growth and discretionary spending were down and inflation rates were up in many important markets for Alliance, such as the United Kingdom and United States.
"It’s not catastrophic, but there’s a few clouds out there."
Other challenges included shipping meat to markets and he used the route to North America as an example.
Before Covid-19 hit, boats arrived as scheduled about 85% of the time.
After Covid-19, boats arrived as scheduled about 20% of the time, making it difficult to get chilled meat to market in an edible form.
The shipping arrival rate on the route had "clawed" its way up to 60%.
Before Covid-19, the cost to ship a 40-foot refrigerated container on the route cost about US$3000 [NZ$5300].
Last month, it cost US$7000 [$12500] to ship the same container.
"The logistics challenge isn’t going away anytime soon."
