The shrinking reserves for red meat research and marketing

Meat and Livestock Australia’s funding reserves have fallen by more than half since 2019, but the board maintains it is in a “really strong financial position”.

Red meat research, development and marketing reserves have shrunk from $114 million in 2019 to $44.8 million at the end of the past financial year.

But the Meat and Livestock Australia board and staff assured the small group of delegates at last week’s annual general meeting that “the company is in a really strong financial position”.

And under questioning, it was revealed the target for MLA reserves was just $32 million.

The small crowd at the Meat and Livestock annual general meeting this year.

The level of reserves came up twice at the AGM in questions from Bairnsdale producer Ken White, who said spending had “ground into our financial reserves” as red meat producers.

Cattle Australia deputy chairman Garry Edwards also questioned the board over reserves, saying there had been a “very material decline over the past three years”.

Mr Edwards said more than 60 per cent of MLA's reserves had disappeared with five consecutive negative years.

He questioned the MLA board about its strategy to remediate the drawdown on reserves and where it felt reserves should sit.

MLA chairman Alan Beckett said the company was in a “really strong financial position”.

“For years, the company was making surpluses and so what we are doing is starting to eat back into those surpluses to really use them for services,” Mr Beckett said.

“The company is in a really strong position – we would always like more levies but no, (it’s) not a concern (the drawdown of reserves).

“The board has a policy on what the reserve should be. In past years, that (reserve) has been building up and we have a policy to bring it back to the board (chosen) level.”

MLA chief operating officer Andrew Ferguson said reserves had been operating “well above the required board level” for the past five years.

“We have been incurring some deficits over the last few years and over the last few years, that has been more considerable and largely that’s because the levy income has been coming off,” Mr Ferguson said.

He said MLA had been “dipping into” reserves to be able to maintain a consistent level of expenditure.

But he said levy income should increase, and the first four months of this financial year

were considerably ahead of where they were last year and slightly ahead of budget.

“The company will start to make surpluses again, and this will take place over next couple of years,” Mr Ferguson said.

Votes from the small crowd and online, as well as proxies from the chairman, elected Lou Hogan and Russell Lethbridge as directors to the board.

The only other motion was to increase the cap on director renumeration from $750,000 to $850,000. It was the first increase since 2008.