SFF chief executive Simon Limmer says pressure on the South Island network is forecast for late November and he urged all farmers to work with livestock representatives to plan supply.
Meat plants are opening earlier and farmers are urged to offload ewes and lambs now, rather than holding on to them to avoid looming processing backlogs.
Silver Fern Farms (SFF) is warning space could become an issue in the North Island within two weeks and opened its Waitotara plant near Whanganui two weeks earlier than planned and is offering assistance to send ewes to the South Island for grazing and slaughter.
In a market update, chief executive Simon Limmer says a labour shortage, disrupted shipping schedules and uncertain container availability hangs over the traditional early season surge in livestock availability, which could create a space backlog.
Limmer says pressure on the South Island network is forecast for late November and he urged all farmers to work with livestock representatives to plan supply.
“We strongly encourage suppliers who can offload lambs and ewes to do so now to avoid lengthy delays that are expected in the coming weeks,” Limmer said.
The warning does not come as a surprise to AgriHQ senior analyst Mel Croad, who says they have been forecasting this for some time.
She notes it will impact all processors.
Spring in parts of the North and South Islands has been wet and cool, which has slowed lambs putting on condition and, in areas which have had several unfavourable seasons, ewes are not performing as expected.
“In early areas, farmers are only getting half their usual weaning drafts away, or they are having to wait one or two weeks longer for liveweights to pick up,” Croad said.
She says the seasonal influx combined with slower chain speeds, due to a shortage of meat workers and shipping issues, is likely to create space congestion in North Island plants from December and in the South Island in late December to January.
Limmer says lamb pricing is forecasted to ease from $9.40/kg at present to about $8 by Christmas, but Croad says if prices fall $1.40/kg in six weeks, it will not be because of weak markets.
“We don’t see that degree of downside in overseas markets for lamb this side of Christmas,” Croad said.
All overseas markets for lamb are strong and have yet to show any weakness, but Croad acknowledges prices could be influenced by domestic issues such as labour shortages, shipping issues and expected space congestion.
These factors will result in some pricing pressure, but AgriHQ is still forecasting an average price above $8.50/kg for December with further downward adjustment in the new year as markets respond to increased export lamb volumes.
