Processing and supply chain update

// Industry

Here’s another update on livestock processing and the global supply chain issues.

Image of meat processing

Processing capacity

Processing capacity across New Zealand is returning to normal seasonal levels. Capacity varies from plant to plant but it is ranging from 80–100 per cent across the country. Companies are continuing to work through the back-log of animals.

Year-on-year processing is still behind last season across all stock types. The industry’s existing labour shortage remains a challenge.

Companies are keeping a close eye on storage capacity with the global supply chain crisis still causing significant problems for exporters. It’s important livestock inflows into plants are aligned with companies’ ability to ship products to their markets.

Processing snapshot

Across the country, the rate of lamb processing has improved, but the total number processed remains about 1.5 million head behind last year. At this stage, it looks like the processing season will be extended by 3–4 weeks.

Despite the back-log, there is not too much pressure on processing as some farmers appear to be holding on to their stock to take advantage of the good feed conditions in parts of the country.

However, we’re encouraging farmers to think about their processing plans for the next two months, bearing in mind that there may be a potential capacity squeeze resulting from the influx of bobby calves into plants from mid-July in the North Island and late July in the South Island.

Cull cow processing remains still well behind last season (over 100,000 head behind). Some farmers may be holding onto their animals for longer because of the improving feed situation in some regions and strong farmgate milk prices.

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

Currently, average waiting times for cattle processing is between 4–6 weeks.

The dry conditions in Waikato have eased following recent rain and we are hopeful the soil temperatures will support good grass growth.

Advice for farmers

Visit the B+LNZ COVID-19 webpage and DairyNZ website for more information.

Talk to your key advisors, neighbours and friends.

Call 0800 BEEF LAMB (0800 233 352) or 0800 4 DAIRYNZ (0800 4 324 7969)