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Australia's largest cattle company, Australian Agricultural Company (AACo), has announced it will suspend operations at its abattoir outside of Darwin.
A review was launched into Livingstone Beef earlier this year after the company admitted the $100 million asset was underperforming.
CEO Hugh Killen said the decision had been made to mothball operations as soon as practical while "having regard to existing employee, customer and other operational commitments".
While the abattoir had commitments through to August, Mr Killen said it was likely to be suspended by September 30, "if not earlier".
The facility, which has been running for three years, employs about 200 people, who Mr Killen spoke to at the site this morning.
"There is obviously an impact on people. My absolute focus now is on them and ensuring that we do the right thing by them and helping them through what's going to be a difficult transition.
"The mood is very sombre. We have a lot of very good people there that invested a huge amount of time in making the plant a success and it's extremely sad and painful that we've had to make this decision."
He said while some employees would be redeployed elsewhere, many would be made redundant in coming months.
"Unfortunately there'll be an impact on employment and we'll be making people redundant as we move through the close down," he said.
Profitable in 'right market environment'
In a statement to the ASX, AACo said the decision to suspend operations at Livingstone came at a cost.
"The total one-off write-down of $74.9 million includes a one-off non-cash impairment of $69.5 million with respect to buildings, improvements, plant and equipment and an additional $5.4 million provision recorded for an onerous contract in relation to Livingstone Beef, is slightly higher than the range expected," it said.
AACo said the facility will be maintained at a level that would allow processing to restart should market conditions improve, while keeping costs to a minimum.
The statement reiterated that the company could still be profitable under the right circumstances.
"AACo believes there is substantial optionality value in Livingstone Beef," the statement said.
"In the right market environment, and with the right operating model, Livingstone Beef can be a profitable operation with significant strategic value.
"The decision announced today enables this value to be maintained."
'A lot of people are going to be a bit stuck'
For the Murphy family at Kalala Station near Daly Waters, the closing of the abattoir means they'll have to find another market for their cull cows and bulls.
It will also mean less work for the family's trucking business which delivered a lot of cattle to Livingstone.
Amanda Murphy said she was shocked and disappointed when she heard the news.
"A lot of pastoralists and property owners are going to feel it, and unfortunately now there's going to be some old cows and old bulls running around the paddocks that have nowhere to go," Ms Murphy said.
"I think a lot of people are going to be a bit stuck with where to go next as a lot of those cattle can't travel.
She hoped in the future it may start up again, either under the same operator or a new one, and offer more competitive prices.
"I think that's one thing a lot of people would say — they couldn't meet the market with the prices they were giving for cattle which is why a lot of people weren't actually going there," she said.
But she said the suspension of the abattoir was not representative of the NT cattle industry as a whole, which she said remained "very strong".
Sourcing alternative markets may challenge producers
NT Cattlemen's Association chief executive Paul Burke said many producers would now be assessing where they can market cattle.
He believed it had processed about 500 head of cattle a day, depending on the season, all of which would now have to be transported to alternative markets.
"From an industry perspective it's certainly disappointing," he said.
However, he hoped there would "be a pathway forward" from the suspension, and said the association was willing to work with AACo to make that happen.
"Certainly trading conditions have been difficult over the past two years for processing and for the live export industry as well," he said.
"No business can sustain losses for a long period of time.
"We stand ready to work with AACo in any way to assist."
Losing money during the beef boom
Despite high cattle prices over the last 12 months Australia's biggest beef producer has gone from a $133.2 million profit last financial year to an EBITDA (earnings before interest, taxes, depreciation, and amortization) loss of $35.3 million.
AACo said its earnings were impacted by a number of factors including "increased competition affecting certain parts of the product portfolio, reduced volumes due to less reliance on external supply, and increased input costs driven by dry weather conditions".
Mr Killen remained optimistic though and said AACo will continue financial discipline going forward.
"We have taken decisive action to stem the losses confronting the business and are focusing on ensuring the company is on an even-footing from which to realise its strong potential for growth," he said.
"The decisions we have made as part of our comprehensive change agenda have made an immediate impact on the business and financial performance of the company, and will enable us to ensure we are realising the potential inherent in our unique integrated supply chain.
"We plan on continuing to advance plans to extend our brand reach in existing markets, as well as new launches in key high-value markets where that makes commercial sense.
"Work is already well-progressed on building the market data and insights needed to support strong, successful expansion of our brand footprint."