By Neal Wallace, Richard Rennie and Gerald Piddock.
Three of New Zealand’s leading export sectors have together forsaken an estimated $400 million of potential export revenue due to last season’s labour shortages and sickness.
Official figures have not been released, but industry sources said the meat industry lost more than $100m in unrealised revenue, and the kiwifruit sector reported a 170 million-tray harvest, well down on initial estimates of 190 million-plus.
The 20 million-tray gap between estimate and actual harvest represents a loss to the sector of almost $200m in export earnings, in part due to intensive fruit thinning by growers amid fears they would not have the pickers for a heavy crop.
Meanwhile there are reports of fruit quality issues from last season’s crop, some due to orchard practices and picking methods related to staff shortages.
The apple sector has reported a 12% decline in its harvest compared to last year, equivalent to 3 million fewer cartons, which equates to $100m in lost export income for growers.
The decline has been attributed partly to weather but also to staff shortages and covid at peak harvest times.
The loss to the meat sector is due to not having staff to process cuts to desired specifications and having to forgo sellable product.
Beef has been the worst affected, with some estimates saying that $60 a head of revenue has been forgone.
Meat Industry Association chief executive Sirma Karapeeva said an official analysis has not been done, but she believes the $100m estimate is plausible given that the sector is 2500 workers short.
She said companies focused on keeping chains operating at the expense of further processing and product recovery.
The country’s two largest meat companies are warning farmers to prepare for another prolonged season plagued by labour shortages and shipping disruptions.
A loosening of migrant rules will help, but they represent only 5% of the sector’s 25,000 workforce.
Meat companies fear staff availability could worsen in the coming season as borders reopen and people resume travelling.
“Competition for labour was and will be for the foreseeable future an issue for the whole primary sector,” said Silver Fern Farms chief executive Simon Limmer.
Alliance manufacturing manager Willie Wiese concurs.
“We’re expecting another difficult season with labour requirements, especially from November to June,” Wiese said.
Companies have invested in automation and are looking to enhance employment conditions and opportunities for their existing workforce but Wiese said these measures will not fully compensate for staff shortages.
He said a $600 referral incentive scheme was introduced last season, the minimum wage has been lifted to $24.50 /hr and a 2% wage rise is being negotiated as part of the collective agreement.
“We are doing a number of things to retain and attract staff, but it won’t be enough and we need to do more.”
Limmer said a loosening of immigration settings offers a partial fix. The company is also looking at employment settings and how to incentivise careers with seasons likely to be longer.
Because plants are primarily situated in regional areas, Limmer said, the company is building accommodation for migrant and transient staff.
Speaking at the recent Primary Industries of NZ Summit in Auckland, Kotahi chief executive David Ross said global disruption will continue to affect NZ trade.
One of the key shipping measures is global schedule integrity – how often container ships are arriving and departing on time against their published schedule. At present it is sitting at about 35%, which means two out of three ships globally are not on time. The metric has been as low as 30% before, but is usually at 80%.
It means ships are losing capacity because they cannot complete as many cycles as they usually would.
In some of NZ’s trade lanes, 25%-30% of the capacity disappears due to the ship being in a traffic jam, Ross said.
