Gun shy stock agents around the country are expected to tighten their processor credit facilities following the unexpected default in payment earlier this month by Gippsland-based beef exporter, GH Keily of Moe.
It’s the third time this year that stock agency industry has been left holding a bag of unpaid processor bills that all up this financial year has topped $7 million.
The Keily collapse which has left debts owing thus far of $3.357 million sees the agency industry shouldering about $2.50m of this burden after the processor applied for voluntary administration on the Good Friday eve, with receivers Pitcher Partners of Melbourne appointed.
Many agents are understandably extremely sour and totally dismayed by this experience when it’s been learnt that, only days before the administrator was engaged, the exporter had conducted a direct-to-the-public sale of surplus meat goods, advertising that business on the day would be conducted on a cash-only basis.
Stock and Land has learnt the advertisement was placed in the exporter’s local newspaper, the Latrobe Valley Express, on March 30 and advised a full range of “quality cuts” were for sale on Saturday April 4 from the Moe Abattoirs site.
“Bring your esky and ice” the advertisement screamed.
The company was placed in voluntary administration on April 9 and as a consequence no fewer than 63 agencies and buyers have been trapped in its web – most of these private family businesses.
A scan of the company creditor list seen by Stock and Land identifies that these agencies hail from as far north as central NSW, the whole of Victoria and west into South Australia.
The average debt per creditor is in the order of $20,000 to 30,000 with largest in excess of $600,000 while the largest private agency stands to lose $170,000.
“Understandably agents are nervous and very unhappy” one Gippsland agent said.
“With bullocks selling at over a $1000 a head, lambs at over $100 a head and mutton pulling 250c/kg the industry is wondering who will be next,” another said.
“It’s not something that we are allowed to talk about collectively. But processors across the board are stretching their payments during these tough times with an uncomfortable percentage more than 21 days out”, he said.
