Shipping delays and staff shortages bite the meat industry

Friday, 10 December 2021

Mimihau farmer Ben Dooley says farmers are beginning to worry about being able to get stock killed at meat works as the industry struggles with staff shortages and shipping delays.

Farmers are starting to struggle to get stock killed because staff shortages and shipping woes are causing major issues in the meat industry.

Ben Dooley, a farmer from Mimihau in Southland, said he had 200 ewes booked in with Alliance Group next week, but he was worried about finding more space for stock in the coming months.

“It’s definitely concerning. If this shipping container issue doesn’t get sorted out then we’re going to have some big problems in the next few months.”

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The Alliance Group and Silver Fern Farms both say chronic labour shortages and global supply chain issues were causing problems.

Alliance Group general manager livestock and shareholder services Danny Hailes.

SFF general manager supply chain Dan Boulton said the company was about 550 people short across its network.

“Accessing skilled labour in the processing sector is becoming more difficult each year, and this season has not been helped by low unemployment levels and stringent immigration rules,’’ he said.

Wait times for South Island lamb processing will likely to be 10-15 per cent worse than last season and the processor expected that to continue through until March 2022, he said.

“This peak season will be one of our most challenging to date.’’

“In terms of logistics, normally we’d expect around 90 percent of boats to be arriving at port on time to take product to market, however at the moment only 20 percent are arriving on time. Thankfully our partnership with Fonterra through Kotahi puts us in a stronger position to manage through this. Last year, Kotahi helped us achieve an almost record level of export volumes despite disruption.’’

Kotahi is a supply chain collaboration between Fonterra and SFF, which has signed long-term strategic commitments with Maersk Line and Port of Tauranga.

Alliance Group general manager livestock and shareholder services Danny Hailes said the border closure, as well as the limited managed isolation spots, have prevented the cooperative from employing workers from overseas to help make up the shortfall in numbers it can recruit locally.

“Unemployment is also low, especially in our regional communities where our plants are located,’’ he said.

‘’Fortunately, we have been able to bring in a small cohort of Cook Islanders as we ramp up processing and they are popular members of our workforce.’’

But global supply chain issues are also making it difficult to move product into export markets.

Meat Industry Association chief executive Sirma Karapeeva said New Zealand’s red meat sector exports reached $693 million during October. (File photo)

“Like many primary sector businesses, we also continue to be impacted by the global supply chain issues including container shortages, off schedule vessels, delayed transit times, and port productivity,’’ Hailes said.

“We need to carefully balance livestock flow and processing volumes with our ability to ship products to our global markets and Alliance is working hard to minimise the impact on farmers.’’

The cooperative would be bringing on additional processing capacity across its plants over the coming weeks. At Lorneville, the fifth chain is coming on, and it is recruiting for the sixth chain, subject to labour availability.

“In order to avoid putting undue pressure on cool stores and shipping, we are currently only taking livestock from shareholders.’’

Dooley said if farmers could not get stock away to the meat works than the alternatives became expensive.

“… we could carry them through as freezer ewes, but there’s no demand for them, or we can use some more nitrogen on the grass, but that’s gone up from $600 a tonne last year to $1400 a tonne at the moment.

“We’ve been lucky that we’ve been able to make plenty of baleage, but you don’t want to be feeding that out too early.’’

Meat Industry Association chief executive Sirma Karapeeva said a mixture of supply constraints and good demand in key markets had contributed to high sheep meat prices.

“Value growth in our key global markets was across the board, with beef up 28 per cent to $231m and co-products increasing by 30 per cent to $153m.”

Overall, the value of China’s imports of New Zealand red meat was up 34 per cent to $262m, the United States by 47 per cent to $138m, Japan by 29 per cent to $31m and the Netherlands by 76 per cent to $30m.