Livestock processing

// Industry

Processing capacity at New Zealand’s plants is recovering as more people return to work after isolating or stayed at home to look after family members due to COVID-19.

meat processing

Joint update from Beef + Lamb New Zealand, the Meat Industry Association, DairyNZ and Federated Farmers.

However, processing delays remain as companies work through the back-log that has built up as a result of the reduced staff numbers and the existing chronic labour shortage.

Capacity will vary from plant to plant but it is ranging between 70–90 per cent across the country.

Year-on-year processing is still behind last season across all stock types.

As mentioned previously, the length of the processing delays will depend on how far each region is through the processing season and every processor and plant will have different run modes for ovine and bovine.

Processors are bringing on additional capacity for cattle, moving stock across their networks and moving workers to other plants to ease the pressure.

We encourage farmers to talk to their individual processors to understand how the delays will affect them.

National snapshot

Across the country, lamb processing has improved and is now about 2–4 weeks behind last year.

Cattle processing remains behind last season and the situation is compounded by an increasing number of cull cows being sent to plants for processing, which is typical for this time of year.

We are continuing to monitor the cattle situation in the lower South Island as we head into winter. Some companies are now operating close to typical seasonal capacity and are focused on processing cull cows.

There has also been recent rain in Southland, which has eased concerns over the dry conditions, however grass growth is being hampered by low soil temperatures.

Global supply chain

The global supply chain continues to be significantly affected by the pandemic with Shanghai, Rotterdam and the west coast of North America particularly impacted.

Port congestion, vessel schedule changes and a shortage of containers are causing bottlenecks and increased costs across the supply chain.

While Shanghai is not the major import port in China for New Zealand red meat, it is still an important entry point. At this stage, the port is continuing to operate, but there is significant disruption and congestion. As Shanghai is one of the largest ports, the disruption there could spread throughout the Chinese port network and lead to delays and congestion at other ports.

For New Zealand’s meat exporters, this could mean delays in getting containers cleared and higher costs if containers have to be re-routed to other ports. There could also be a knock-on effect on the inland distribution network for our products.

The red meat sector has demonstrated real resilience and agility during the COVID-19 pandemic. Our companies’ strong customer relationships and our diverse market portfolio (over 120 countries) mean our exporters can swiftly move products between different markets and channels to mitigate the impact of the disruption.

Advice for farmers

Visit the B+LNZ and DairyNZ websites for more information.

Talk to your key advisors, neighbours and friends.

Although there is currently not a pressing feed situation in most parts of the country, consider putting a feed budget in place and ensuring you have feed reserves in the event you need to hold onto livestock for longer.

Call 0800 BEEFLAMB (0800 233 352), 0800 4 DairyNZ (0800 4 324 7969) or 0800 327 646 (0800 FARMING) for one-on-one advice.