Days to the General Election: 20
See Party Policies here. Party Lists here.

Allan Barber says that with Chinese shoppers switching from pork to beef and buying more online, sheep and beef farmers can be pleased they are producing product which the world still values

Allan Barber says that with Chinese shoppers switching from pork to beef and buying more online, sheep and beef farmers can be pleased they are producing product which the world still values

Processing is under severe constraints during the lockdown, although, as an essential service, meat companies are working hard to feed New Zealanders and service key export markets.

In a newsletter to staff and suppliers, AFFCO states that processing restrictions on maintaining a minimum distance between employees means sheepmeat capacity is running at 50% of normal and beef capacity is close to 65%. This of course comes at the peak of the season, exacerbated by drought in several regions, particularly the top half of the North Island.

Because meat companies aren’t entitled to government wage subsidies, they have set up schemes to look after employees whose earnings would be adversely affected, either by an inability to work for reasons of age or dependants or the reduced volume throughput. In AFFCO’s case, employees are paid their full production bonus based on numbers processed before the Level 4 lockdown, while those unable to work receive a company funded support package of $585 gross per week for an initial four week period.

The companies are also providing food donations to iwi and community based organisations: AFFCO is supporting organisations in Moerewa, Wairoa and Whanganui, while Greenlea has made a sizeable donation of beef mince to the Salvation Army.

The return of China to the market, after the significant drop at the beginning of the year from the combined effect of Chinese New Year and Covid-19, has been a positive factor compensating for the pandemic-led disruption to traditional European and North American markets. The sales pattern has changed with the restaurant and food service trade almost coming to a halt, whereas sales to supermarkets and online sales channels have increased. It’s quite possible online sales of meat and fresh produce will remain at high levels after the end of the pandemic, as such events tend to lead to a faster pace of change in consumer buying habits.

The outbreak of Covid-19 has seen the meat industry collaborate through the Meat Industry Association to develop a best practice protocol in a short timeframe which has enabled all processors to continue working whilst ensuring the health and safety of their employees.

At the same time farmers still receive prices that are holding up remarkably well at such an uncertain time, providing they can obtain space at the works. While prices are down from their pre-Christmas peak – those weren’t sustainable – they are still good by historical standards.

The outlook is uncertain, as is inevitable in such volatile times, but sheep and beef farmers can be pleased they are producing product which the world still values and working in an industry which is deemed essential.


Current schedule and saleyard prices are available in the right-hand menu of the Rural section of this website. This article was first pubilshed in Farmers Weekly. It is here with permission.

Y Lamb

Select chart tabs »

The 'NZ average $/hd' chart will be drawn here.
Loading...
The 'NI avg 17.5kg $/hd' chart will be drawn here.
Loading...
The 'SI avg 17.5kg $/hd' chart will be drawn here.
Loading...

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

6 Comments

The NZ meat industry is not unaccustomed to challenges, there is not much about it that is not uphill on a day by day basis. AFFCO the longest surviving recognised brand from the “old days” appears to be demonstrating that its new structure under private ownership has very certain advantages. Single minded decision making and objectives from the top obviously provide effective control and direction rather than the cluttered and often cross legged approach of the co-operative types in trying to please all comers.

Interesting to learn via your excellent article, Allan, that meat companies are not able to use the wage subsidy scheme. That they are creating their own self-funded version is good news. It puts the lie to the accusation so blithely scattered through comments that 'companies Bad', and that only Gubmints can provide. It also highlights the role, so often unsung and overlooked, that private philanthropy plays in delivering succour to the needy.

Otago Daily Times 8 April, like the Tamaki church, Alliance applied to receive Govt wage subsidy,might need it someone said lornville upgrade could be 30 to 45 million,shame clueless Cuff and those sit on arse directors didn't buy S/F with a minuscule increase in debt at time ,( if any ), instead chose to create the waitaki bullshit myth thus have duplication of everything from million dollar computer systems to drafters. Just as well 75 million invested,in 2011 or so to improve returns to meat producers ,the two primary growth parterships ,Lets hope the debt free (debt free) 14 plant S/F can improve there appalling profit performance from last year,chairmen sent email on trips to china and book club earlier in year (GRIEF),ceo and directors fees greater than net profit( great work if you can get it),may be they should brought 1 plant in debt (in debt thats right) Blue Sky whose profit in last 2 years shames theres on all metrics ,with repairs and maintenance expenditure 30 million,and done away with the current ceo and directors,dont hold your breath, I am sure they will have diversified markets and contingencies should maling get in trouble.Some bed time viewing,is realvision.com(daily briefing) for april 3th,to get thoughts of macro investor,Dont no what happens if Chinese currency or economy crashs ,but suspect wont be good for nz,but oil down,so interest rates so farmers may be in for windfall.

itriedtoreaditbuttheweirdpunctuationdefeatedmeafterthefirstsentenceoratleastthatswhatithinkitwas

He speaks common sense, who cares if he does not speak like a poncey english grammar head.

Like the cycle of opportunities of cheap credit in the housing ponzi scheme, Farmer need to use this opportunities to hit hard, get as much as you can and prepare, diversify still in primary consumption's area.
Unlike, the property loan binge.. be sensible more - prolonged/unchecked greed will be always the downfall

Days to the General Election: 20
See Party Policies here. Party Lists here.