Norco flood loss: $27.5m loss for northern dairy co-operative
Norco may have been hit hard by the Lismore floods, but $46m in government grants is helping it rebuild farmer equity.
Lismore’s February floods have cost Norco dairy co-operative $41m in damages, as revealed in its 2021-22 annual report released to farmers this week.
By far the greatest loss was the damage to the co-operative’s Lismore ice-cream factory, which was undergoing a $30m upgrade at the time.
All up Norco recorded losses of:
• $24.5m to its ice-cream business
• $9m in stock losses
• $7.5m in employee expenses and clean-up costs
Those losses led to Norco recording a $27.5m net loss - before recognition of tax loss benefits.
However, the co-op recently won $46m in NSW and Federal Government grants to help rebuild its flood-damaged ice-cream factory.
The total cost of the rebuild is $59m, which should revive Norco’s equity position, which had slumped from $80.7m prior to the floods, down to $61.2m in its aftermath.
“The 28 February 2022 will be a date that will go down in history for our co-operative, our members and many of our staff due to the impacts of a devastating natural disaster,” Norco chairman Michael Jeffery said in his report to farmers.
“While our sites in Lismore could withstand a one-in-100-year flood event, with some short-term minimal impact, this flood event was more than two metres higher than any other flood in recorded history and it caused significant damage and losses at many of the co-operative’s facilities.”
Despite the floods, Mr Jeffery said Norco was still able to inject $4.5m to boost the farmgate milk price during the year, to aid members’ recovery from the floods and cover surging costs of production.
Norco chief executive Michael Hampson said the co-operative had built-in resilience over recent years, by reducing “net debt to $4.7m at 30 June 2022, the lowest level in many years”. “This is a considerable improvement on the 2019 financial year end, where net debt was $36.5m – this clearly points to the resilience now created in the co-operative, and the benefits of the change to our new operating model that we commenced in 2020,” he said.
He said the Norco brand continued to grow in Queensland and NSW, with an annual national retail sales growth rate of 5.3 per cent in 2021-22.
“When considering the white milk category declined at 2.1 per cent, this growth shows the focused activity of the sales and marketing team to communicate the point of difference of the Norco brand to consumers.
“It also shows that consumers do understand that supporting a 100 per cent farmer-owned co-operative is a unique value proposition.”
NSW North Coast second wave of flooding puts farmers on alert again
Farmers in areas on the NSW North Coast declared as catastrophe zones earlier this month have been forced to pause the recovery effort and prepare for a second major flood event.
Four weeks ago, Paul Weir watched his milking herd wash away in floodwaters on his farm at Tuncester near Lismore.
Now he has moved what cattle and machinery he has left to higher ground out of reach of a "two-metre flood".
He has given up worrying about things outside of his control.
"It's more a psychological blow I think and slowing up any recovery and drying out, that's probably the biggest disappointment," he said.
"I can't stop the flood, if Mother Nature wants to put a record flood again well so be it, we haven't got as much to lose this time that's for sure."
With his dairy still a few weeks away from being repaired, his surviving cows have been moved to a farm at Goolmangar to be milked.
But he is worried that he may lose 1,000 fence posts and 500 round bales of quality feed he had bought and trucked in for when his milkers returned.
"We stacked the majority of that here above the one-in-100 flood level and I did err on caution, and we did take four semi loads up to higher ground on another farm just in case we got another flood," he said.
The NSW Department of Primary Industries said the main areas of concern were the Tweed River at Tumbulgum, the Wilsons and Richmond Rivers in the Northern Rivers and the Orara, Kalang and Bellinger Rivers on the Coffs Coast.
Jimmy Burnett from the DPI's Emergency Management Unit said another flood event was a "bit of a kick in the guts" for farmers just starting the recovery process.
"We've completed about 92 per cent of our requests for assistance from the last events, and we've provided about 2,000 tonnes of fodder in that time," he said.
"We're still counting the dollar impact. We still don't know what the impact has meant because so many of our landholders in the area are still counting the damage."
Landholders should call the Agricultural and Animal Services Hotline on 1800 814 647 from 8am–8pm if they need veterinary assistance or emergency fodder.