Meat industry performing well under Level 4

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 – these 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.

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Tags: AFFCO, beef prices, Greenlea, lamb prices, level 4 lockdown, Meat Industry Association, meat processing, sheep and beef farmers