Carr’s Q1 feed output up despite Cumbria floods

A trading update from Carr’s Group reports that its animal feed volumes are up year on year, despite the very mild autumn weather and a flooding incident at its Lancaster feed mill and blending plant.

 

 

The Group reports higher compound feed volumes across its three mills in the first 18 weeks of the current financial year, although margins continue to be under pressure. UK feed block sales in the UK have been negatively affected by the very warm autumn and winter weather so far. In contrast, the US feed block market has continued to build on the previous year’s excellent performance, as cattle numbers continue to recover in that market. Still in the US, Carr’s redevelopment of the feed block manufacturing plant in Nevada, acquired in June 2013, is complete with the first Smartlic brand blocks made last month.

The Carr’s Billington Agriculture (CBA) feed mill at Lancaster was flooded during the early-December storms that affected much of the northern UK, particularly Cumbria, and disrupted residents, businesses and transport links. On December 5th, production staff were evacuated from Lancaster after the mill was flooded to a depth of approximately four feet of water by the River Lune. 

The company initiated a recovery plan. Following a significant commitment by experienced mill personnel and engineering resources, the compound mill is now fully operable, returning to full production on Sunday December 13th.  The  coarse mix and bagging plants on the same site were operational by Monday December 21st.  The plant was thoroughly deep cleaned and disinfected and extensive repairs completed on various production equipment.

There was a similar flood at the CBA country store at Hexham. Staff attending the site on Sunday December 6th had the store ready to open for business on the Monday morning. 

"Carr's management conveys their thanks to all the staff involved and also the support we received from various feed manufacturers who supplied product in this interim period where we were able to satisfy our customers’ requirements successfully," says a CBA statement.

With many of its rural and agricultural customers also directly affected by the floods, Carr’s says it worked with those affected to assist where possible and ensure that needs were met. 

The CBA rural retailing operation has successfully integrated last year’s acquisitions of the Green (Agriculture) and Reid & Robertson businesses, and reports a positive start to the period. However, Carr’s farm machinery sales are feeling the effect of the reduction in farm incomes.

“Despite the various challenges, including continued depressed livestock and farmgate milk prices being received by our UK farming customers, the overall performance of the Agriculture division continues to be in line with expectations,“ states Group chief executive Tim Davies.

“Cumbria in particular has faced enormous challenges as a result of the flooding following Storm Desmond.  Despite the direct impact of the floods on some of our employees, customers and suppliers, the direct financial impact on the Group is covered by insurance.  The speed of our recovery owes much to the resilience and tenacity of our employees.

“We face a number of headwinds in the markets in which we operate.  However, our geographic diversity, investment across our asset base, together with the acquisitions we have made, will continue to set us apart and ensure the Group remains in a robust position over the medium to long term.  Additionally our strong balance sheet ensures we remain in a good position to take advantage of any potential acquisition opportunities.”

Posted on January 5, 2016 and filed under Company News, Feed.