Alliance group chief executive said farmers holding back livestock were creating inefficiencies across the meat processing network. Photo / Rowena Duncum
By Monique Steele of RNZ
Farmers holding onto stock for longer may cause problems along the chain, a meat processor says.
Good weather across much of the country this summer has meant most farmers have good feed levels.
Alliance group chief executive, Willie Wiese said farmers were holding back livestock, especially sheep, to add weight.
He said this was creating inefficiencies across the meat processing network.
“Because we have a seasonal workforce in the red meat sector, you can’t necessarily put your plants on and off, and the moment you call end of season it’s not that easy to get those seasons back up and running,” Wiese said.
“So we’re not as efficient as we would like to be due to the decisions farmers make at short notice, but we’re dealing with that as best we can and we’re looking for alternatives.”
Wiese said the flow of livestock was 25 per cent slower than forecast for this time of year, which could have an impact on meeting its supply obligations with export partners.
He said the business was carrying out a review of its capacity, which could see changes come, as it looked to get through summer processing into winter.
“When those peaks really come on, there might not be the capacity that farmers think there will be to process all the animals when they want them processed.
“So there might be significant waiting periods - as all the processors are currently looking at taking out the inefficiency within their processing network,” he said.
Wiese said decisions about the review would come over the next few weeks.
AgriHQ’s latest market report shows the North Island kill has run around a week behind last year since November which was a “historic low”.
“If there is a bottleneck, it’ll likely be around Easter or not long after given many hill country stations will need to start thinking about conserving feed for winter, plus summer crop farmers typically offload around this time too,” it said.
Low prices and good feed in the North Island were impacting the livestock flow, it said.
But it was a different story in the South Island, where the kill season to date was ahead of last year by about 5 per cent.
The report said most processors across the country were paying $5.80/kg to $6.10/kg this week.
- RNZ
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