One of Australia’s biggest and oldest live export companies has gone into voluntary administration in a sign of how much pressure the industry is under.
- NACC goes into voluntary administration, owing around $3.6 million
- Record high domestic and live export cattle prices are putting pressure on exporters
- Export companies report losing between $200 and $300 per head
North Australian Cattle Company (NACC) was founded in 1980 and was run by Elders for nearly three decades until its sale to a Chinese-Australian buyer in 2017.
On Monday, the company went into voluntary administration with debts of approximately $3.6 million.
A statement from administrator Jirsch Sutherland said the company was impacted by the pandemic, delays in shipments, the quarantine required for cattle and a competitive global livestock market.
“It’s too early to say what the financial position is as yet, but the estimated amount owing to trade creditors is approximately $3.6 million,” it said.
NACC general manager Ashley James told ABC Rural he was unable to comment on the state of the business until administrators had met with the board.
He said his priority was managing the cattle in the supply chain awaiting processing in Vietnam.
The company was trying to ascertain how many cattle were yet to be processed, he added, and that “his responsibility was to ensure animal welfare was accounted for”.
“Another focus will be looking after the welfare of the company’s six full-time employees, as staff await further instructions from the administrators.”
NACC confirmed no cattle controlled by the exporter remained in Australian quarantine facilities or at sea.
Tough trading conditions
A low national herd, coupled with strong demand from cattle producers looking to restock after years of drought, has seen prices in both the domestic and live export trade smash records this year.
NT Livestock Exporters’ Association chair David Warriner said live export companies were losing between $200 and $300 per head in Indonesian markets.
“The market up there [Indonesia] and the exporter have to bear that; if the exporters don’t try to meet the importers’ demands for price, they will simply lose customers,” he said.
“There’s not a hell of a lot in it for exporters at the moment.
Regulatory costs starting to bite
In January, the Department of Agriculture announced a sharp increase in cost-recovery measures for the live export trade.
Thomas Elder Markets analyst Matt Dalgleish said live export companies were starting to suffer under increasing regulatory costs.
“And it’s that added straw that breaks the camel’s back that puts businesses under, like we’ve seen recently.”
ABC Rural understands it has been around 12 months since NACC shipped cattle from Darwin but has been exporting slaughter cattle to Vietnam via Townsville.
Mr Warriner said other export companies would “pick up the slack” created by NACC’s absence.
“There’s not hundreds of other customers in those markets, so the importer that was importing from NACC will go to other exporters for their supply,” he said.
“Administration is not a good spot to be, but it’s not as bad as going totally bankrupt.