COVID-19 Update - Moving to Alert Level 3, processing capacity, feed budgeting, Moving Day

24 April 2020

This week, Prime Minister Jacinda Ardern announced that New Zealand will be moving to COVID-19 Alert Level 3 on Tuesday 28 April, with the Alert Level being reviewed again by Cabinet on 11 May. This is welcome news for the primary sector, which is playing a critical role in feeding both New Zealanders and others around the world, but also keeping the wheels of the economy turning.

We know it a challenging time for farmers still facing critical drought and feed issues combined with challenging store market conditions and significant processing waits. B+LNZ, DairyNZ and meat processors and exporters are working hard to support rural communities through this.

 COVID-19 Alert Level 3 for farmers

The change to Alert Level 3 means a loosening of restrictions both in terms of working on farm and an increase in farm support services that can also operate. Because more people might be entering your “bubble”, it’s a good idea to review your safety protocols with your staff ahead of Tuesday.

• The Ministry for Primary Industries (MPI) has provided advice for farmers and other primary industry support services on how they can operate safely under Alert Level 3 and minimise the risk of spreading COVID-19.
• The change to Alert Levels also means there are additional primary industry sectors that can now operate so long as they can do so safely and these are listed on MPI’s website as well.

• There are also a number of COVID-19 resources, advice, and updates on the Beef + Lamb New Zealand website and DairyNZ website.

Update on processing capacity

As you know, the COVID-19 meat processing protocols, which require physical distancing between plant employees to prevent the spread of the virus, has reduced the industry’s processing capacity.

Two weeks ago, the Meat Industry Association and Beef + Lamb New Zealand’s Economic Service, provided an assessment on processing capacity across the country and the potential impact on waiting times for farmers. 

Since the initial estimated capacity position of 50% ovine and 70% beef at the start of April, there have been incremental improvements across both species as plants have bedded in the new way of working and configurations under the protocol. A number of companies are also working overtime, which is helping to offset the capacity restrictions. 

The Meat Industry Association is working with MPI on a new protocol for Alert Level 3, which will define a new set of rules and requirements to ensure the sector’s continuing operations do not compromise worker safety or contribute to the spread of the virus.

This protocol is yet to be finalised, and it is the sector’s hope that it will enable processors to increase their capacity further over the coming weeks to support farmers.

The following is an update on the general picture across the country in terms of processing capacity. We still strongly encourage farmers to continue talking directly with their processor to understand exactly how it will affect them as there will be variation by processor, region and species.

 Lamb, Mutton and Bobby Calves

As noted above, sheep processing was expected to run at 50% of capacity.  Processing since April 1 has broadly reflected this but with a significant lift in sheep throughput in the third week (+25%) in the South Island, which reflects more days of processing and efficiencies gained.  

Year to date analysis suggests that we are 69% through the lamb kill (in both islands) and 80% through the mutton kill against season forecasts, with North Island mutton being slightly ahead of South Island.  We do not want to suggest a wait time figure here for farmers as every processor and plant is different – we just reiterate that farmers should be talking to their processors often.

Lamb processing is being favoured over ewes, with lambs being 95% of the sheep processed in the South Island and 91% in the North Island for April so far. 

It is unlikely there will be any impact on processing of bobby calves because that is typically done in the fourth quarter of the season (i.e. from July onwards), which is expected to be after the restrictions have been lifted and the backlog cleared.  There may be some administrative delays in processors contacting farmers with staff not being able to access offices under the lock-down.

Adult Cattle

Cattle processing throughput since April 1 has broadly reflected the 30% reduction in processing capacity expected. As with sheep meat, cattle processing has seen a significant lift in the third week of April with a 15% increase in throughput across the country.  

The last three weeks has seen a gradual lift in cull dairy cow processing with these now being 60% of the weekly kill through both islands.  Around 90,000 cull cows have been processed in the last three weeks and the year to date kill is now estimated at 55% complete in the North Island and 41% in the South Island with traditionally the bulk in both islands coming in May. We have heard from some farmers that the processing wait times they are hearing from their livestock agents are longer than the published figures from some meat processors. If this is happening, dairy farmers please call 0800 4 DairyNZ and ask to speak to a regional animal care specialist so DairyNZ can gather more detail from you and try to help. 

 Markets

There has also been significant disruption to New Zealand’s global markets and the situation is very fluid. For example, the food service sector in some of our most lucrative markets has been significantly affected due to lock-downs. We are also hearing reports of importers defaulting on contracts because their customers are unable to fulfil contracts. At the same time, manufacturing beef into the US had an overnight lift in price. This volatility is expected to continue and farmers should stay in close contact with the processors to ensure they have the latest intelligence.

 Feed resources

Based on the processing situation above, it is clear there will continue to be pressure on feed across the country and our strong recommendation remains for farmers to ensure they have a feed plan in place and that it is regularly updated.  

 A number of resources and services have been developed across the primary sector to help farmers with feed budgeting and supply:

• In early April, B+LNZ, DairyNZ, Deer Industry New Zealand, AgFirst, and Federated Farmers jointly launched a feed budgeting service for farmers. To access this service, there are three toll-free numbers: Dry stock sector Beef + Lamb New Zealand: 0800BEEFLAMB (0800 233 352), Dairy sector DairyNZ: 0800 4 DairyNZ (0800 4 3247969), and other stock and graziers call AgFirst:  0508 AGFIRST (0508 243 477).
• B+LNZ has also developed a feed management checklist for farmers to better understand their individual situation in relation to feed supplies, and this includes more resources in relation to feed, including the FeedSmart app.
• DairyNZ has also developed guidance on Steps to a Successful Spring for dairy farmers, reflecting the tight conditions expected from now and through winter for many.

• NEW:  The following is a B+LNZ funded case study by AgFirst of a Northland property exploring the options for best handling the current drought situation from a feed and financial perspective that may be useful for farmers as they consider their tactical and strategic decisions. B+LNZ has commissioned further case studies for other parts of the country and will be releasing these over the coming weeks: AgFirst Northland Case Study  

 Moving Day

DairyNZ and Federated Farmers have reached agreement with the government on protocols for the safe movement of people, livestock, machinery, and other goods to enable Moving Day to go ahead on 1 June. Useful information is available here: https://www.dairynz.co.nz/business/adverse-events/coronavirus-covid-19-information/moving-day/.  

Given that a lot of young stock move at the start of May from dairy to sheep and beef farms, farmers should make sure they have their COVID-19, NAIT and Mycoplasma bovis protocols well sorted.  Sheep and beef farmers can draw on the COVID-19 advice that B+LNZ has created, including the 10 Point Plan. MPI has also produced guidance on transporting stock during the COVID-19 lockdowns.  Specific guidance for stock movements on moving day is also likely to come out closer to the day and we will update farmers on this.  

 Bio-security

The M. bovis eradication programme is continuing to operate as an essential service under the current COVID-19 restrictions.  We’d like to remind all farmers about the importance of maintaining complete and accurate records in NAIT, as this is an essential tool for the speedy tracing of animals and ultimately for protecting everybody’s farms and the wider industry.

The following are links to M. bovis resource for graziers: 

https://beeflambnz.com/knowledge-hub/PDF/biosecurity-communication-plan-graziers  https://www.dairynz.co.nz/business/biosecurity/biosecurity-on-grazing-properties/

MIA, B+LNZ and DairyNZ will continue to work with our industry partners, including Federated Farmers to ensure you’ve got the most up-to-date information for decision making.  If there is anything else you need from us, please let us know.