SFF chief executive Dean Hamilton said that depended on future land use change, but it appeared the steam had gone out of converting sheep and beef farms to dairy, dairy support and viticulture.
Equally, sheep numbers were unlikely to significantly increase and though land use would always be driven by the activity giving the highest return, Hamilton hoped numbers would settle at about 28 million.
“If that is the new level then I don’t see significant changes.
“We have no planned changes this season but there is no chief executive in the industry who would say there would never be change.”
Hamilton said excess processing capacity meant it was inevitable a South Island plant had to close regardless of last year’s $267 million investment in SFF by Chinese meat processor and retailer Shanghai Maling.
SFF decided to close Fairton a month ago after a review determined it was losing money and had inadequate throughput, processing just over 325,000 in six months this season compared to consistent kills of more than a million lambs up to 2010.
There was no pre-commitment or request by Shanghai Maling to close the plant.
“The reduced sheep numbers and reduced throughout at Fairton has not been driven by Shanghai Maling.
“I don’t know where people have drawn the bow.”
Improving the use of strategically positioned meat plants had always been SFF’s policy and was mentioned in its submission to the Overseas Investment Office supporting Shanghai Maling’s investment.
Accusations by opposition political parties that Shanghai Maling had not contributed anything to the partnership other than the closure of Fairton were well wide of the mark.
The year before Shanghai Maling’s investment SFF spent $8m on capital expenditure. This year it was spending $22m on more than 400 projects including packaging robotics, upgrading waste disposal and electricity efficiency.
“We could not spend $22m if we hadn’t had that capital investment by Shanghai Maling.”
Asked about documentation released by Shanghai Maling before the merger that indicated Fairton and Waitane near Gore could close, Hamilton said it was part of the pre-investment discussion.
Due diligence by potential investors had highlighted the overcapacity issue and SFF was asked how it could be addressed.
Hamilton said SFF had no further plans for rationalisation in the immediate future.
Pareora handled sheep, beef and, following a $7m investment, venison. Fairton handled only sheep and bobby calves.
While sheep numbers had fallen, cattle numbers had increased.
A lack of freezer space at Fairton meant meat was already trucked to Pareora and workers there should now have a longer, more secure season.
“We can be more efficient and competitive with one large, full plant than two part filled plants,” he said.
Stock sourced from the top of the South Island would have another hour drive to Timaru but Hamilton said 80% of those who supplied Fairton also supplied stock to Pareora.
