Department of Agriculture and Water Resources, April 2016
These case studies share examples of existing farmer collaboration
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- The NCMC was formed by beef producers in 1933 to gain ‘a more equitable distribution of the fruits of their toil’.
- Distance was and still is a challenge for NCMC, but the capacity to process their meat locally was a critical advantage.
- NCMC has a commercial focus and approaches challenges by seeking out alternative markets and being flexible and innovative.
- Challenges include non-technical barriers to trade, such as economic and political conditions, as well as domestic conditions.
- NCMC’s performance as a processor is generally counter-cyclical to the fortunes of its 1 300 producer members, meaning processors may do well when producers are facing tough times.
- As well as access to the new processing facility, members can access marketing advice, share in earnings and receive discounted services.
- With 900 employees and annual turnover of about $290 million, NCMC’s success demonstrates the potential for profit and scale offered by the co-operative model.
- For further information visit agriculture.gov.au/cooperatives
As Australia’s farmers recovered from the Great Depression, beef producers in the Northern Rivers region of NSW united to start Northern Co-operative Meat Company Ltd (NCMC) to process their meat. Their motivation was simple: to gain ‘a more equitable distribution of the fruits of their toil’, as noted in their 1933 foundation document.
Having the capacity to process their meat locally was a critical advantage, given the 700-plus kilometres between their Casino base and Sydney’s Homebush markets.
More than 80 years later, distance from markets is still a challenge for members because 70 per cent of the produce NCMC processes is exported, says Chairman John Seccombe. While NCMC does not supply meat (just processing services), its members’ access to export markets has expanded NCMC’s annual turnover to about $290 million—demonstrating the enormous potential for profit and scale offered by the co-operative model. It employs more than 900 full-time staff across two meat-processing facilities (for beef, veal and pork) and a hide processing plant. But it is often the nontechnical barriers to trade, rather than distance factors, that are most testing, he says. These include currency movements and economic and political conditions in countries buying members’ produce.
Then there are domestic conditions, such as climate factors, that can dictate and disrupt the supply of cattle to NCMC. The co-op’s performance is generally counter-cyclical to the fortunes of its 1 300 producer members, John says. This may mean when producers face tough times, processors do well. ‘We’ve had unprecedentedly high levels of slaughter rates because of the drought over the past two to three years. This has enabled us to invest in a $30 million expansion of our cold storage facility in 2015 and to distribute
$3 million in surpluses to members.’
NCMC’s approach is to Seek out alternative markets, and be flexible, innovative and ‘best on ground’.
We all face similar issues. We are better off recognising we have common needs and working as an alliance.
‘But we are currently facing a very uncertain time over the next three to four years due to low supply of cattle as farmers keep stock to fatten up or breed from.’
NCMC’s approach to domestic and international challenges is to seek out alternative markets, and be flexible, innovative and ‘best on ground’. ‘Very few other plants offer a full service facility and scale. Our new facility will automatically store, select, pack and load out frozen cartons more efficiently for our 200 operator members.’
This was made possible because the co-op retained sufficient capital, reflecting its commercial focus, he says.
As well as access to NCMC’s new processing facility, members can receive livestock marketing advice, share in distributed earnings and receive discounted member services.
NCMC supports local charities and community activities and is a co-founder of the Co-operative Alliance. This collaboration with other producer and service co-operatives aims to improve members’ productivity and local employment opportunities and promote regional co-operatives. ‘We all face similar issues: infrastructure, finding the right employees, members’ businesses that lack the scale to be profitable. There is no point in going for the same dollar when seeking government assistance. We are better off recognising we have common needs and working as an alliance.’
These case studies were compiled by RIRDC to share examples of existing farmer collaboration.