Producers withhold stock as processors struggle with Covid

Producers have withheld stock from saleyards as concerns mount over processor shutdowns due to Covid outbreaks.

Lamb prices eased last week and normally huge summer yardings have halved as Covid slashes the meat processing sector’s workforce and processors struggle to keep plants open.

Prices for sheep and lambs fell $10-$30 at some markets last week, as processors pulled back from purchasing.

Wagga Wagga’s market in NSW was hit hard, but to the surprise of agents, today’s Bendigo market “held up very well” with prices firming and most buyers active.

According to the Australian Meat Industry Council, some plants in southern Australia are down to 30-40 per cent of their processing capacity due to the shortage of workers who are either suffering from Covid, in isolation, or staying away from work due to fears of contracting the virus.

This is putting pressure on the entire supply chain, with concerns mounting that the lack of buying and processing of sheep and lambs will create a glut in the market, and further harm prices.

At Bendigo today, agents and vendors had feared a swift price drop so the yarding plummeted from the usual 14,000 sold at this time of year to around 8000.

This followed the Wagga Wagga sale last week which recorded price falls of around $20 a head on lamb in a tiny market — relative to usual yardings at this time of year — of around 7800 lambs and sheep.

According to NLRS reporter Leann Dax, it was Wagga Wagga’s lowest number of lambs and sheep on record.

She said very few processors operated, with many lots passed in and prices generally dipping $16 to $32.

Lambs 21kg to 24kg sold from $169 to $212 to average 804c/kg carcass weight.

Extra heavy lambs sold from $220 to $300 to average 805c/kg to 868c/kg.

“It was a mixed quality yarding of mutton that was offered to a very small group of buyers due to plant closures and lack of staff,” Ms Dax reported.

“Heavy ewes sold to very weak demand averaging 503c/kg to 605c/kg. Trade sheep made $102 to $140 to average 529c/kg.”

Off the back of that result many producers and agents decided to withhold lambs from today’s Bendigo fixture.

But, buyers turned up today and were active, holding prices firm to pre-Christmas rates.

FP Nevins & Co Bendigo agent Chris Nevins told The Weekly Times this morning that “the job was very firm”.

“We were worried it was going to be a lot cheaper, but prices still got to $260 for the tops and good crossbreds, $200 or so in the sheep job,” he said.

“All the buyers were there and operating; Coles, Safeway (Woolworths), Fletchers, and Hardwicks, they were all having a go, but Herds wasn’t there.

“It surprised us, we were all a bit concerned but it was alright in the end.”

With many lambs withheld from sale this week, the question remained about the backlog of lambs this had created.

“I hope lamb prices stay where they are, it should hold up OK, but next week will tell the story, we will have to wait and see what numbers come into markets then and how that unfolds,” Mr Nevins said.

Agents in action at Bendigo saleyards. Picture: File – Andy Rogers

The processor issues are also flowing on to market scheduling, with agents forced to cancel some fixtures.

According to the Corowa Associated Stock Agents a sale planned to run today has been cancelled due to the “shortage of numbers and also buyers”, as several major works were not processing.

The next Corowa sale is planned for Monday January 17.

According to the National Livestock Reporting Service, Hamilton’s sheep market recorded falls of $5-$10 on pre-Christmas rates last Thursday. The small yarding only drew 5937 sheep.

NLRS reporter Chris Agnew said that not all regular buyers attended or bought, and that most processors had been affected by Covid workforce issues.

At Ballarat on Tuesday, the NLRS also reported that prices were softer, by up to $20 due to the Covid pressure on plants.

According to a spokeswoman for NLRS no NLRS-reported sales throughout Australia were cancelled for the coming week, with operations expected to continue as normal at these fixtures. However, she said numbers were down across the board.

NLRS publishes its slaughter report tomorrow, so this will give the industry an indication of how far behind the annual lamb slaughter is, and what backlog of lambs to be processed were being withheld from markets.