Ten of the country's 80 meat processing plants will have to close for processing capacity to match livestock supply.
The size of the tsunami bearing down on farmers and the meat industry has been highlighted by information released by the New Zealand Meat Workers Union, which dramatically illustrates the Alliance Group's surplus processing capacity in Southland, but also the wider issue facing the industry throughout New Zealand.
Even without storms last spring that killed a million lambs in Otago and Southland, the union says Alliance Group could have handled all its Southland lamb kill through Lorneville, one of two plants it operates in the province.
The union paper talks in terms of surplus plants, but other meat industry leaders talk about surplus capacity, which they say can be reduced by not operating multiple shifts or by mothballing one chain in each multi-chain works.
In the South the main sheep and beef processing players are Alliance, which operates multi-chain plants at Lorneville and Mataura, which also handles stock sourced from Otago, and other large works at Pukeuri, near Oamaru, and Smithfield at Timaru.
Silver Fern Farms has a single-chain plant south of Gore and large works at Finegand, near Balclutha, and Pareora, near Timaru, while Blue Sky Meats has a small works north of Invercargill.
The union briefing notes acquired by the Otago Daily Times warned there were 750,000 fewer lambs in Southland this year, of which 450,000 would have been handled by Alliance.
Last spring's Otago-Southland lamb total was 8.25 million, down 1.17 million due to the storm and changed land use.
In the past six years the national lamb kill has fallen by six million and Beef and Lamb New Zealand is forecasting this year's kill to be fewer than 20 million for the first time.
Unionsays10meatplantsexcesstorequirements> From Page 23The information is included in union discussion notes ahead of a vote by Mataura's 800 workers on whether to accept new contracts which include lower wages and greater productivity to ensure the plant stays open.
Alliance Group has said it will spend $13.1 million upgrading the beef unit at Mataura and another $14 million reducing overheads and reducing its footprint, but only if workers accept the new contracts, which the union said could mean pay cuts of up to $400 a week.
Claims 10 meat processing plants throughout New Zealand will have to close was not new to Federated Farmers board member and Southland sheep farmer David Rose, who said companies having to focus on sourcing stock to keep plants working were not able to give attention to marketing and product development.
Meat worker wages were also being affected, with some chains not starting and plants working short days and short weeks due to the lack of stock.
The Meat Industry Association said the country's 80 meat works directly employed about 40,000 people, many of them seasonal workers.
Silver Fern Farms has been the last company to rationalise, in 2007-08 closing its Oringi sheep meats facility in the North Island, Burnside venison plant, restructuring its Silverstream meat cutting plant and closing sheep and lamb slaughter capacity at its Canterbury works.
