Australian Meat processors battling to make money due to record livestock prices
Record livestock prices are forcing some abattoirs in New South Wales to cancel shifts or shut down operations in the short term.
JBS shut down its plant in Scone last Friday due to a shortage of livestock while Southern Meats in Goulburn has shut down its plant this week.
The Eastern Young Cattle Indicator (EYCI) hit a record high this week as rainfall around New South Wales and Queensland encouraged producers to hang on to their livestock.
The price of young cattle has doubled in the first two months of 2020 and while a record number of cows and heifers were processed last year slaughter rates are now slowing down significantly.
That is creating big problems for the red meat industry and the peak body is now calling for cuts to government charges to help keep the abattoirs running.
Tough time for sheep meat sector as well
Trade lamb prices have also surged 25 per cent this year and are now threatening the $10/kg barrier.
The sharp rise forced Southern Meats Group to shut down its abattoir in Goulburn this week.
CEO Coll MacRury said it was a short-term strategy to help manage costs and avoid them running at a loss.
Southern Meats will be operating with limited kills next week but the outlook is likely to get even harder for sheep processors.
Rural Bank is forecasting a 45 per cent drop in the slaughter rate heading into winter as producers hang on to their livestock to re-build the flock after the long drought.
Mr MacRury confirmed the company’s other in Western Australia WAMMCO would continue to operate at this stage.
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