Labour shortages and supply chain disruption due to COVID-19 are increasing pressure on the New Zealand red meat industry, says Meat Industry Association (MIA) chief executive Sirma Karapeeva.

Karapeeva says current strong meat prices are compensating for a drop in the volume of exports, with sheepmeat volumes down 11 per cent and beef down seven per cent compared to February 2021.

“Absenteeism in processing plants due to staff having to isolate during the COVID-19 pandemic is adding to the pressure on our industry, which is already dealing with a significant labour shortage and ongoing global logistics challenges.”

“While the impact of labour shortages in the industry is not yet showing up in the headline export data, they are starting to affect exports of specific products,” she says. 

Karapeeva says the volume of offal exported in February was down around 35 per cent compared to February exports in the previous six years, indicating that there aren’t the staff available to process every part of the carcass, and companies are not able to maximise the value of each carcass that is processed.

“The supply chain issues are reflected in the drop in volumes of chilled sheepmeat, with more exporters opting to send frozen product to markets. Chilled sheepmeat exports were down 18 per cent compared to last February, with the largest drop to the UK, which was down 52 per cent.”

“This drop in chilled meat exports impacts our ability to capture greater market value from our products. Chilled meat is a sophisticated value-add product backed by sophisticated processing and innovation. However, the supply chain disruption means that we can’t extract the maximum value because frozen products often attract a lower price point.”

Despite this, the industry has continued to make strong returns, which have seen $1.1 billion of exports during February 2022, with increases in value to all major markets.

The overall value of exports to China increased by four per cent to $406m during February, the United States was up 34 per cent to $238m and the UK 28 per cent to $66m.

The value of sheepmeat exports was up by 13 per cent to $475m and beef by 34 per cent to $460m. Co-products continued to perform well, with exports worth $172m, an increase of 16 per cent.

Chilled beef exports held up better than sheepmeat, with the volume exported lifting slightly, by one per cent. There was a 10 per cent drop in the volume of overall beef exports to China, to 17,938 tonnes, but February 2021 was a record month, and the overall volumes were still historically very high.