Beef chains under pressure

Bottlenecks at freezing works in drought periods are causing major loss of revenue to Canterbury farmers reports the Rural News. And with NIWA warning that drought will be more frequent and severe, meat processors must do more to send market signals to farmers than simply a weekly meat schedule. "˜The schedule price on a particular week is not the greatest way to manage the feed situation in the South Island,' says Gary Walton, Meat & Wool NZ regional manager in Christchurch. "˜It's all about sending and reading the right signals.' Canterbury is now in its fourth month of below-average rainfall "˜and the unfortunate truth is that it's getting serious. A decent rain won't save us.' Trucks are shifting stock out of the district on to less-affected farms in areas like Tasman/Marlborough in the north and Southland and parts of Otago. "˜From now on it's premium space only at freezing works. It's hard to get, hopeless to get beef through in the last three to four weeks. "˜Space has been overbooked for some time. This is good prime beef on the farms that we don't have the processing capacity for. The freezing works will drop the meat schedule to move out the supply curve but farmers don't have the luxury of hanging on.'