Virus hits cold storage availability

Farmers are worried about the impact of the coronavirus after Silver Fern Farms talked of reducing meat processing because of cold storage shortages.

In an email to suppliers, the company warned that congestion at Chinese ports caused by the health emergency had put considerable pressure on New Zealand’s cold storage space.

From next week, it would reduce mutton processing in the ‘‘very short term’’ to minimise the future risk of significant stoppages at its plants – alarming news for drought-stricken farmers wanting to cull stock to conserve feed.

Silver Fern Farms chief executive Simon Limmer said yesterday that production was back on track after finding extra cold storage, but he admitted that problems related to the virus were not over.

‘‘This is a dynamic and changing situation, and we will continue to assess our options daily.’’

The company said the virus meant Chinese businesses, ports and government departments were operating at restricted capacity, so it was having to hold product destined for China.

Beef and lamb had been diverted to alternative markets but there were few options for mutton, because China was the main market globally.

Alliance Group’s meat processing has not been affected by storage issues but general manager livestock Danny Hailes said the virus outbreak had reduced red meat consumption in China, primarily in restaurants, and there was downward pressure on prices.

Meat Industry Association trade and economic manager Sirma Karapeeva said diverting meat destined for China to alternative markets was a costly business because of the need for new documentation and contractual arrangements.