Labour shortage; challenging processing season ahead

Silver Fern Farms — which is about 550 workers short across its network — says this peak season will be one of its most challenging to date.

While strong demand was generating healthy farm gate pricing, risks included logistics challenges, Covid-19 and labour shortages which threatened to unsettle that, general manager supply chain Dan Boulton said.

Some farmers have raised concerns about difficulties getting enough space for lamb weaning drafts and citing the potential flow-on effects from that.

Mr Boulton said processors and industry bodies have been signalling sector labour shortages in advance to suppliers to help avoid disappointment.

"Labour shortages are impacting right now and South Island lamb suppliers in particular will need to plan for this. Wait times for South Island lamb processing will likely to be 10-15% worse than last season and we expect these will continue through until March 2022.

"We strongly recommend suppliers get in touch with their livestock rep early to plan their bookings in advance," he said.

Accessing skills labour in the processing sector was becoming more difficult each year and this season had not been helped by low unemployment levels and stringent immigration rules, Mr Boulton said.

The company had various initiatives under way to help address the labour shortages, including raising its minimum productive rate by 10%.

Alliance Group general manager livestock and shareholder services Danny Hailes said livestock flow and processing volumes needed to be carefully balanced with the ability to ship products to global markets and Alliance was working hard to minimise the impact on farmers.

It would bring on additional processing capacity across its plant network over the coming weeks, however, like all companies in the sector, it was constrained by labour shortages and the global supply chain issues, Mr Hailes said.

The fifth chain was coming on at its Lorneville plant in Southland and the company was recruiting for the sixth chain, but that was subject to labour availability.

To avoid putting undue pressure on cool stores and shipping, Alliance was only taking livestock from shareholders. It was also asking farmers to keep in touch with their livestock representative and encouraging suppliers who were not shareholders to become shareholders, he said.

ANZ’s latest Agri-Focus report said processing new-season lambs was getting under way but it had been a slow start to the season. Poor growing conditions and low pasture covers going into winter resulted in a challenging spring in many regions. The surplus of pasture arrived a little later than normal and that had kept lamb growth rates in check.

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