1996/99
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NCF record operating profit of £1.22m for last year
6 May 1998
THE North Connacht Farmers Co-Operative showed a slight drop in turnover from £165.25m in 1997 to £164.54m last year. Profit before tax was £1.22m compared to £1.52m the previous year.
Commenting on the co-ops performance, the chairman, Dan Gilmartin, said the fall in the market value of dairy products and a reduction in the sale of feeds and fertilisers contributed to the fall in turnover.
These reductions were offset to some extent by an increase in turnover in the marts and timber processing.
The reduced profit reflected a difficult year in the sawmilling company due to high log prices which impacted on the entire industry, Mr. Gilmartin said.
In this regard, he said, he was pleased to report an improvement in the current year.
Dairy Division
The report indicated that market returns for dairy products fell sharply at the end of 1996 and early 1997 due mainly to green pound revaluations resulting in reductions in the milk price in the first four months.
These revaluations were partly offset by EU compensation.
The market for butter picked up in the second half of the year resulting in a milk price increase plus a bonus of 2p which the co-op paid in December on all milk supplied to November 30.
Referring to the new herbal butter with garlic which NCF developed for the German market under the Kerrygold label, Mr. Gilmartin said that NCF was delighted with the success of the product and was particularly pleased that it won the 1997 Best New Product Award.
"The development of this herbal butter product and the highly successful Connacht Gold reflects our commitment to develop new products which will enhance the returns or our Dairy Division for the benefit of our milk suppliers", Mr. Gilmartin said.
He added that despite fierce competition, some of it quite irrational, the co-op's liquid milk subsidiaries held their market share which, he said, reflected strong customer loyalty for their quality products.
The chairman reported that Shannonside had performed satisfactorily last year producing casein and whey and was recognised as one of the leading manufacturers of these internationally traded dairy products. He also revealed that the co-op's milk quota had again been exceeded at March 31 1998, although by a relatively small amount.
Mr. Gilmartin was critical of the Santer proposals in relation to dairying.
He said: "We are totally opposed to the 15% price eductions in the proposals and fully support the strong stand being taken on the issue by the Minister and farm organisations."
He welcomed the recent joint NCF/Teagasc initiative in launching a dairy development programme aimed at maximising the profitability of milk production in the region.
In an uncertain market situation, it is essential that farmers maximise efficiency by adopting best practices appropriate to this region, the chairman said.
Farm Inputs division
A drop in sales of feed and fertilisers was in line with the national trend which reflected exceptionally favourable grass growing conditions and the over quota situation in the milk sector.
This accounted for a reduction in turnover of £1.5m to £36.9m.
Mr. Gilmartin said that NCF was continuing to develop the hardware side of its retail store business which it saw as a growth area.
Marts division
Turnover was up from £48.6m in 1996 to £52.6m in 1997 due to the inclusion of the newly acquired Swinford mart for the full year whereas it contributed only six weeks sales in 196, having opened in mid-November.
The average price of cattle was down 3% while sheep prices were up an average of 7%.
Mr. Gilmartin warned that the 30-day brucellosis test and accompanying sale restrictions could have serious implications for mart business.
"Cognisance will have to be taken of the new situation especially in the valley periods", he said.
As in the dairy sector, the chairman was also critical of the proposed 30% cut in beef prices outlined in the Santer document.
"These proposals must be resisted by our Government", he stressed,
He said the proposed compensation falls short of what is required.
Objective 1 Status
Mr. Gilmartin said that NCF fully supports the campaign being waged by the Council for the West and other groups for the retention of Objective 1 Status for a number of disadvantaged regions after 1999.
He said that recent official statistics showed that the West, Midlands and Border regions will qualify for Objective 1 Status for several years due to the low income levels compared to the EU average.
He believed that the EU authorities would approve the granting of such status up to 2006 and beyond, if necessary, if our Government was prepared to support the case.
"We call upon the Government to honour its pre-election commitment to seek objective ! Status for these regions", Mr. Gilmartin said.
The annual general meeting of the co-op will be held in St. Brigid's hall, Tubbercurry on Tuesday May 12 at 8p.m. as in former years a 2.5% dividend is being proposed.
