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Red meat not immune to supply chain shortages

13 January 2022

Key points:

  • COVID-19 isolation measures have caused acute short-term staffing shortages across the supply chain, including in meat processing plants
  • New government protocols introduced this week should alleviate the issue for the meat processing sector
  • Slaughter levels have reduced, while saleyard prices remain stable.

Recently, there have been many reports of shopping centres across the country selling out of groceries and other essentials. This has been caused by staff shortages resulting from COVID-19 isolation rules for positive tests and close contacts.

As the number of COVID-19 cases climbs, so have the number of close contacts. Those that test positive and their associated close contacts have had to isolate, preventing them from working for up to a week.

It’s important to note these staff shortages are affecting all classes of grocery items and services, and is not a meat-specific issue. Industries particularly affected include hospitality, freight, healthcare, processing and retail.

Slaughter impacted by staffing shortages

Last week, the national cattle slaughter was 41,678 head, 65% below the same week in 2020 and 41% below last year. In lambs, national slaughter last week was 216,931 head. This was 34% below last year’s weekly slaughter. However, these low slaughter numbers are also to be expected early in the year when some plants are still shut due to standard Christmas closures.

Encouragingly, the definition of a close contact has been eased for those involved in the meat processing sector. Employees in meat processing determined to be a close contact will be able to leave isolation for work purposes provided they’re not showing any symptoms of the virus and do a daily rapid antigen test. This is expected to allow a significant numbers of workers in the processing sector to return to work.

Effect on saleyard prices

The reduction in slaughter hasn’t flowed through to weaker saleyard prices. As the national indicators resumed this week, the prices for most categories remained relatively stable (with the exception of heavy lamb, heavy steer and medium cow and steer prices).