Monday, 30 March 2020 08:49

COVID-19: Meat plants’ capacity down, prices under threat

Written by  Staff Reporters
Alliance's plants have seen a 50% reduction in ovine capacity and a 30% reduction in bovine capacity. Alliance's plants have seen a 50% reduction in ovine capacity and a 30% reduction in bovine capacity.

Meat processor Alliance is warning farmers to brace for a drop in prices for their lamb and cattle.

In an email to farmers last night, Alliance chief executive David Surveyor says the COVID-19 situation remains challenging for the co-op and wider meat processing industry.

The co-op’s plants have resumed processing under the new rules and restrictions set by the Government but with reduced capacity: 50% reduction in ovine capacity and a 30% reduction in bovine capacity. There is no impact on cervine capacity.

“This means a new way of working for our people and we will look to increase capacity as we learn how to optimise the operational constraints created by Alert Level 4,” he says.

“This is likely to be common across the industry. We are, as always, prioritising livestock from Platinum and Gold shareholders.”

Surveyor told farmers that the pricing volatility and the changed operational run modes for its plants means the co-op is significantly less efficient as a result of COVID-19. 

“Although we are holding the livestock schedule this week, it is likely to cause downward movement in prices. 

“We will do our best to minimise the extent of this, but it is unlikely we will be able to absorb the full impact.”
The co-op is asking farmers to hold back stock until capacity steps back up.

“From a farmer perspective, we know you will be considering what this means about timeframes for when your animals will be processed, and we will be providing you with clarity on this going forward,” Surveyor says.

“We are asking that farmers who are in a position to do so, prepare for holding stock for longer periods until the capacity steps back up. We would also appreciate it if farmers can let their livestock representative know, so we can prioritise those farmers facing drier conditions on farm.”

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