Heat and coronavirus putting pressure on meat industry

It's created a perfect storm for the sector.
It's created a perfect storm for the sector. Photo credit: RNZ/Maja Burry

By Maja Burry of RNZ

Meat processor Silver Fern Farms says trade disruptions in China, combined with dry conditions across New Zealand, have created a perfect storm for the sector.

The shortage of pasture here due to hot weather means more farmers are wanting send stock to the works - but with shipments of meat to China being delayed due to the coronavirus outbreak, cold storage space in New Zealand for processed meat is under pressure.

Silver Fern Farms chief executive Simon Limmer said it was working hard try and balance storage and processing capacity.

"It's a little bit of a perfect storm I guess at the moment because whilst we've got big livestock flows, plus the drought really putting pressure on processing capacity, the coronavirus situation has meant we don't have a lot of confidence to in our ability, or the supply chains ability to get product into China just at the moment."

Limmer said, in response to the situation, it had sourced additional cool storage and was moving product up and down the country.

He said any of its farmer suppliers that were struggling due to the dry conditions should talk to their livestock representative.

"We recognise that farmers have got pressure coming at them in terms of their feed, so we're endeavouring to work as closely as we can with farmers and ensure we are supporting them, but there is a bit of a back-log [to process animals] and it's just a particularly busy time at the moment," he said.

Limmer said he was pleased with how the company had responded to the disruption. Events like this highlighted to exporters the importance of supplying a range of markets and also having a product mix that allows flexibility, he said.

Agriculture Minister Damien O'Connor said he was aware of the challenges facing the sector at the moment.

"I know that the meat processors are doing all they can [to support farmers] but of course offshore there are some logistical challenges.

"Farmers helping farmers, shifting feed around, hopefully will get us through this tight period," he said.

O'Connor said there would be ongoing demand for New Zealand protein in China. In recent years the country has been grappling with the pig disease African swine fever, which has resulted in the China importing more meat.