Works are now flat out

NZ Farmers Weekly 15 December 2017, by Alan Williams

Silver Fern Farms, the country’s biggest beef processor, expects this month’s cattle kill to be a record for December.

“It has changed so quickly since everywhere became dry,” chief executive Dean Hamilton said.

“The third week in November was significantly up, the last week in November busier again and each week in December has had more numbers.

“It’s dry from Dargaville to Southland.”

It was the same for Affco.

National livestock manager Tom Young said King Country was the only place with meaningful rain.

Beef schedules were easing in reaction to United States imported beef prices coming back as buyers there saw the big New Zealand processing volumes.

Lamb schedules were still in the stellar $7kg area.

All the meat processors were flat out.

Suppliers to both Silver Fern and Affco had a one to two week wait to get both cattle and sheep processed.

Rain in many areas last week wasn’t expected to change kill patterns, Hamilton said.

“The rain is a nice reprieve but farmers have made up their minds to get stock away by the end of the year.”

Affco numbers were well up on this time last year with more lambs, prime steers, bulls and cows, Young said.

“We’re getting a huge number of bulls and prime steers.”

Plants in both islands were working overtime and Saturdays to keep up with demand and would be operating over the Christmas-new year break.

“We’re trying to find space for all types of animals, trying to keep all farmers happy and not just focus on one type.”

For sheep meat, lambs were the priority but Affco was processing mutton in both islands.

The manufacturing beef price in the US was down about US20c/lb for bulls in the last three weeks and by 10c/15c for cows, Hamilton said.

That was not unusual for this time of year, with customers there seeing big supply volumes coming through.

For a typical bull, that added up to about NZ$90 a head.

Hamilton’s estimate put prime animals in the mid-$5/kg range with bulls about $5kg and cows $4kg for manufacturing meat.

Lambs were holding about $7/kg from the tops of $7.30 to $7.50 – helped by strong demand for the Chinese New Year trade for delivery by early February.

Young believed $6.50/kg was a reasonable target for the schedule once the Chinese peak came off, though Hamilton thought it might be early to make a call on that.

Easter was a couple of weeks earlier this year and demand for chilled lamb for Britain and Europe would help when the mid-January market was being framed.

Even then about 40% of the carcase would be going as forequarters and flaps to China and the Middle East, a big driver of the market and typically a bit weaker post-Chinese New Year pricing, he said.

Young said light lambs up to 15kg would be a concern if the dry continued around the country. A pointer there was that feed pressure had reduced store market prices to less than $3kg.