Tallies had fallen by more than two million head since the last major plant closure, Alliance’s Mataura plant in Southland, he told the group’s annual meeting in Nelson on Thursday.
That was putting pressure on balance sheets and profitability of businesses with uncompetitive cost structures.
Alliance was achieving improved operational performance through its transformation strategy and was “well-placed to thrive in this very competitive environment”.
Re-elected as a director at the meeting, Taggart said farmers’ decisions to supply Alliance with livestock had not been as compelling in recent years as previously. He thanked them for doing so when the co-operative had not been as competitive as it would have liked to be.
With the new group strategy the directors were confident their reason to supply Alliance would be more compelling this season and beyond.
Taggart was re-elected with 25.2 million votes, based on the number of shares owned by shareholders. Sitting director Don Morrison was also returned, with 21.57m votes. The unsuccessful candidate was Leon Black, who scored 19.3m votes.
The Alliance strategy was focused on reducing costs through the business but as it progressed would move to capturing value from the marketplace, with several initiatives already under way, Taggart said.
The last year had been a difficult one for both the co-operative and shareholding farmers.
The world was awash with cheap protein such as chicken and pork, fed by weak international grain prices.
Alliance did not attempt to compete with those meats with its own high-price lamb, beef, and venison cuts but lower-value parts of the animals did have to compete with them.
However, confidence had lifted across several sheep meat markets in recent months and more positive signs of economic growth were appearing around the world.
The signs augured well for a medium-term recovery in farmgate prices, though there was still a huge amount of work to do before Alliance delivered the level of performance farmers expected.
Thursday’s meeting was the first held by Alliance in Nelson. Its Stoke plant was the only sheep meat plant in the northern South Island and Taggart said that allowed the co-operative to offer timely, local processing capacity for earthquake-hit farmers.
