January 8, 2008

Shrinking beef and sheep numbers threaten New Zealand's meat plants

Falling numbers of sheep and cattle may force the closure of several meat processing plants in New Zealand in the next few years, according to the New Zealand Herald.

The paper quoted sources who believed up to three sheep processing plants may have to close in the South Island and two beef and sheep plants in the North Island.

The chairmen of the country's two largest meat co-operatives, PPCS and Alliance Group, agree there will be consolidation as farmers react to low meat returns by changing land use.

PPCS chairman Reese Hart said the south of the South Island was "a big worry" because of changing land use from sheep to dairy cows, but said the shift was gradual and nothing would happen for a couple of seasons.

Meat and Wool New Zealand says 300,000 fewer lambs will be available for processing in Otago and Southland this year as against last year.

The Ministry of Agriculture and Fisheries expects 200 sheep and beef farms to convert to dairying in the next two years, with most of those in Southland and Canterbury.

Both chairmen see more co-ordinated marketing as the quickest way to turn the industry's fortunes around, plus scoping of potential in emerging markets such as China and India.

Hart added that companies also had to develop new products to remain relevant to younger consumers, such as an alternative to the traditional lamb leg roast.