Tuesday, February 27, 2024

Supply chain remains problematic

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Meat processors are juggling a host of issues as they urge farmers to plan for further covid-induced supply chain disruptions and a longer kill season.
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Silver Fern Farms general manager supply chain Dan Bouton says processors will pull all stops to avoid disruption pressures from compounding.

Meat processors are juggling a host of issues as they urge farmers to plan for further covid-induced supply chain disruptions and a longer kill season.

Addressing the Beef + Lamb New Zealand – Adapting for Supply Chain Disruption webinar, Silver Fern Farms (SFF) general manager supply chain Dan Bouton said the global supply chain remains as problematic as ever.

“We’re at the point where the disruptions we face every day are nearly the new business as usual for most exporters here in NZ,” Boulton said.

“Shipping capacity, vessel schedules, port productivity and landside infrastructure remain congested and disrupted across every trade lane globally.”

With the processing season reaching its peak and plants short-staffed, there are wait times to get prime cattle slaughtered across both the North and South Islands.

Worker shortages are only expected to get worse over coming weeks as Omicron reaches its peak.

All this comes at a time when the sector is grappling with reduced container availability that is limiting the ability to ship product to overseas markets.

Boulton said some vessels may only call to three NZ ports, whereas they would previously call at five.

“This requires us to export the same volume from less port calls and puts significant pressure on NZ landside and coastal infrastructure to position and move containers across the domestic network,” he said.

Most farmers are already aware of the labour challenges and the impact that has on processors’ ability to collect all value cuts.

It is the impact of Omicron that is harder to predict and how fast it will recover is a moving feast.

“We’ve modelled that Omicron could impact our production capacity by between 20 to 30% over the coming six weeks,” he said.

A later season and the number of animals still on-farm also presents challenges for farmers.

“It goes without saying we all need to plan for a longer season, however, we are doing everything we can to help stop the pressures from compounding,” he said.

“I am confident we can complete the lamb kill before we move to bobby calves and that we can manage our beef backlogs alongside cull cow flows.”

In the meantime, processors are planning for reduced shut down periods between seasons as with sheep kill 9.1% behind this time last year, with an estimated 990,000 lambs still to come in and cattle kill back 2.5%, the plan is for a longer season.

North Island beef at six weeks later is looking to drag out to early July, with South Island beef, four weeks, scheduled for mid-July.

North Island sheep at eight weeks behind are looking at an early June season end, with South Island sheep, 11 weeks, going out to mid-July.

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