Record spend
Meat co-op to spend $230m on livestock this month
Silver Fern Farms is forecast to spend more than $230 million on livestock this month — its biggest livestock spend month ever — as high volumes caused by dry conditions, and high prices make their mark.
Chief executive Dean Hamilton said the warm weather throughout the country had pushed stock processing levels higher than normally seen in December.
Plants had been brought on early due to the rapid dry-off after good spring growing conditions and the company had recruited more than 1000 new seasonal staff.
Each week, Silver Fern Farms was processing more than 20,000 cattle, 180,000 sheep and 3500 deer. All plants were operating at or near capacity with additional chains, overtime, night-shifts where it could and Saturday shifts so the high flows could be processed.
Even with record levels of weekly capacity and throughput, there was “exceptional” demand by farmers for space, and queues for processing space were forming, Mr Hamilton said.
The combination of high volumes and high livestock prices, particularly for lamb, mutton and venison, meant the company was now forecast to spend more than $230 million on livestock alone this month.
The new equity investment by Shanghai Maling last year and the company’s new banking facilities meant it had the capacity to manage the high demand on capital, he said.
A similar note to Alliance Group suppliers said the combination of lamb weaning drafts now in full swing and farmers quitting ewes meant the co-operative’s processing capacity was also under pressure.
Alliance was also working with shareholders to ensure store stock from breeders could be placed with finishers, however it was becoming more challenging to secure finishers to take on store lambs as feed started to tighten.
DairyNZ extension general manager Andrew Reid encouraged dairy farmers to have a plan in case dry conditions continued. In many regions, silage yields were down and summer crops had been sown late.
He said it was timely to revisit the summer plan and talk through different scenarios with the team, such as supplementary feed usage, culling policies, once-a-day milking, irrigation priorities and what the target dates and trigger points for dry-off decisions were.