Scotland’s largest farmer-owned business, ANM Group, has announced a sharp decline in trading profit.

Profits fell £375,000 to £778,000 last year, down from £1.153 million in 2005.

Scotch Premier Meat, the 7500-member co-op’s red meat business, was hardest hit, with profits falling from £629,000 in 2005 to a loss of £391,000.

Yorkshire Premier Meat’s profit slipped marginally to £87,000, while Forres-based Highland Country Foods and Glasgow-based Charcuterie Continental, bought two years ago, amassed heavy losses of £64,000 and £117,000 respectively.

“Our results clearly demonstrate that last year’s rise in beef cattle prices has simply come out of the processors’ margin,” chief executive,

Brian Pack, ANM Group chief executive, said the results showed last year’s increase in beef cattle prices had come out of processors’ margins.

 “We were unable to recoup the increased price of our raw material from the market place, partly because of the influx of cow beef on the market,” he said.

But higher beef cattle prices and the introduction of SFP entitlement trading meant Aberdeen and Northern Marts, the group’s core auction business, doubled its profits to £1.101 million.

The revival in the land market also saw Aberdeen and Northern Estates increase profits from £6000 to £78,000.

Mr Pack said the financial performance of the group for the first quarter of 2007 had improved.

Work has begun on a multi-million pound development of a private 18-hole golf course, clubhouse and 42 luxury houses on a farm owned by the group at Maverston, Elgin.

Additional penning is also being bought at Caithness Livestock Centre to cope with increased throughput following the closure of UA Group’s rival mart at Thurso.