Thursday, August 18, 2022

Quit lambs soon, processors warn

Alliance Group’s manager of livestock and shareholder services Danny Hailes says processing volumes are more than 6% behind last season across both islands.

By Neal Wallace and Gerald Piddock

Meat companies are urging farmers not to retain lambs, warning it could further extend what is already one of the longest seasons in history and clash with the bobby calf kill.

Staff shortages and covid-19 mean the season has been prolonged, with data to June 11 revealing the kill is 1.15 million lambs behind the same time last year and 1.6m behind the five year average.

Silver Fern Farms chief executive Simon Limmer says processing delays are nearly back to manageable levels and he is advising farmers not to delay sending lambs for processing given the number still on farms, scheduled plant maintenance shutdowns and the bobby kill about to start.

He warned if left too late, finishers risked being caught with lambs that have cut their teeth.

Limmer says the cull cow season is also nearly complete in the North Island and only a few weeks later in the South Island.

SFF is holding cull cows on grazing and deferring processing until later in the season to help with the mix in its beef processing plants.

Read: In-lamb ewe market mirrors 2021

Alliance Group’s manager of livestock and shareholder services Danny Hailes says processing volumes are more than 6% behind last season across both islands.

“We are seeing a lot of lambs starting to come through that were purchased at a higher buy-in liveweight.

“We have been reminding our farmers of the potential pressure on processing capacity coinciding with bobby calf volumes peaking in August.”

AgriHQ senior analyst Mel Croad agrees, saying the lamb kill started to fall off in May and June and has not recovered.

Export demand has reverted to traditional levels after a couple of years of exceptionally high demand when prices rose sharply through winter.

Last year there was at least one $10/kg contract on the table and weekly schedule rises of up to 30c/kg, underpinned by recovering global markets.

This year, Croad says the release of contracts has been minimal and weekly price rises have been closer to 10c/kg, driven mostly by a favourable exchange rate and procurement pressure.

“This year is very different. The market drivers from a year ago are simply not there and the stock flows domestically are also different.”

She fears delays in consigning lambs will create congestion with the bobby calf kill that will ultimately extend into early spring.

Industry forecasts point to significantly more lambs to process through to October compared to historical data, with those projections amplified by ongoing staffing shortages. 

Croad says the North Island bobby calf kill typically peaks from early July to late August.

In the past five years over this six-week period, between 620,000 and 660,000 calves have been processed.

Peak calf kill is slightly later in the South Island and the five-year average for that six-week window is between 460,000 and 545,000 head.

Also read: Lamb exports absorbed into global markets

Waikato Federated Farmers president Jacqui Hahn is not predicting a space issue for bobby calves, given processors are close to or up to date with processing other species.

Lower than expected pregnancy scanning in some regions could generate more cull ewes, she adds.

Greenlea Premier Meats managing director Tony Egan says any backlog was not affecting its calf processing operation.

The company has a calf chain at its plant in Morrinsville that is about to start in the next few weeks.

“We expect it to be similar to last year or slightly more [busy]. We still have our Hamilton plant doing beef so we can do both calves and beef at the same time.”

He suspected any backlog issue might affect those companies which process calves but do not have a purpose-built calf chain.

“The kill on paper has been a little bit behind, but in reality has been closer to the five year average. We are just doing what we would normally do and we haven’t delayed the start to the calf season,” he said.

He expected there will be few issues with collections and expected it to be similar to last year. Greenlea was also collecting casualty calves this season.

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