Kidman  takes  big hit from drought

27 Oct, 2014 04:55 AM
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S.Kidman & Co has 17 properties, both pastoral leases and freehold, covering 110,000 square kilometres.
If rain comes through it will pull up the flow of cattle to the meat works
S.Kidman & Co has 17 properties, both pastoral leases and freehold, covering 110,000 square kilometres.

AUSTRALIA'S largest private landholder, Adelaide-based cattle producer, S.Kidman & Co, has been hit by poor rainfall and weak domestic cattle prices for the second year in a row.

The group had an after-tax loss of $1.4 million for the 2013-14 financial year, and the primary problem was the value of the Kidman cattle.

Kidman was forced to sell down its herd, by around 15 per cent to 182,000 head, during the year.

The sales were forced because of a second summer of low to zero rainfall in the Queensland channel country and northern South Australia.

They did help deliver positive net operating cash flow of $9.3 million. But with weak cattle prices, the sales were at prices less than book value and the value of the reduced herd was $12.3 million lower than the ­previous year.

Under accounting standards those numbers are offset against sales earnings. Kidman's chairman, John Crosby, said the significant upturn in cattle prices since the June balance date was at last starting to reflect the ongoing high demand and high international pricing for beef.Tough seasonal conditions

Cattle prices have risen around 15 per cent since June.

Mr Crosby said that the tough seasonal conditions had continued.

"Although the Kidman herd continues to be prudently sold down, at this point the prices for sale stock are much improved," he said.

Kidman and others are now watching prices in southern Australia where, after a dryer than normal winter, an above average number of cattle are already being turned off for sale.

The group's chief executive, Greg Campbell, noted a "fair bit of optimism".

"The international price for beef is very strong," he said. "If rain comes through it will pull up the flow of cattle to the meat works."

S.Kidman & Co has 17 properties, both pastoral leases and freehold, covering 110,000 square kilometres in South Australia, Queensland, West Australia and the Northern Territory.

The group did not change the valuation of its land or leases, and it did pay a dividend. The loss was also less than last year's $3.3 million.

AFR
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READER COMMENTS

King Billy
27/10/2014 9:06:45 AM

Hand feed them. When it does rain we will see an major price spike in cattle prices.. It will be very disruptive to the markets and meat works employment but its typical of the meat game. The plants have made a lot of money but they will give a fair bit of it back next year...
Qlander
27/10/2014 10:12:07 AM

So ... Can I assume one of Australia's oldest and largest Ag companies is not in the top 20%?
jaydinsouth
27/10/2014 11:12:22 AM

Qlander ... might not be the best assumption. I've seen a lot smaller enterprises make just a big a loss and not the postive cash flow seen here. Hard to read too much into these things without more detail IMO.
Cocky
27/10/2014 1:13:30 PM

King Billy, The plants will close while crazy farmers with grass fever push the price for cattle up and will come back guns blazing once numbers are breed up again. Slaughter beef will hardly change.

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