Supply Chain Issues still Rampant in Australian Industries

The havoc on the red meat processing industry, in the shape of COVID-19 infections, has kept abattoir workers at home. In turn, this has left supermarket beef shelves completely barren. There’s no way of knowing how long it’ll be before processors appear online at a level that would be expected if the epidemic hadn’t happened. It’s also unclear whether worker absenteeism would be consistent throughout the supply chain, including transportation and distribution. The flow of meat will most likely not return to normal until Omicron illnesses in all areas subside. Certainly, shops and processors aren’t promising anything in terms of timetables, and meat purchasing restrictions remain in place.

When it comes to the ramifications for farmers, such as whether there will be a processing rush on cattle to ‘catch up,’ it is unexplored ground, so no one can predict what will happen. Beef industry veterans believe this is a supply chain issue unlike any they’ve seen before. Moreover, slaughter rates have picked up somewhat from the first week of 2022, likely a result of government changes to isolation rules, and as the Omicron wave hits its peak and comes down the other side, it is expected volumes will at least hold. Still, the kill remains well under the average seasonal pattern.

Analysts Thomas Elders Markets were last week reporting figures were 31 per cent under the slaughter volumes seen for this week last season and 49pc off the pace for the five-year seasonal average.

Overview of the Cattle Market

Meanwhile, as re-stockers hurry to get mouths on the copious amounts of feed La Nina is providing to paddocks, young cattle prices continue to rise. The Eastern Young Cattle Indicator has been rising all week and is approaching $12 per kilogramme carcase weight, a level no one would have predicted. Thus, the supply is fluctuating. Additionally, the processing sector issues appeared to cause some reticence to sell, but the EYCI’s upward rise drew more cattle out.

In any case, demand is swiftly absorbing what’s on offer, and agents continue to believe that yarding sizes might grow dramatically before demand is even marginally stifled. At the present, the feedlot manager is probably dealing with a lot more problems than the farm manager. Experts believe that there will be lessons learned from the current situation with perishable food supply chains that will serve to strengthen agricultural industries going forward.

Article by: Hari Yellina (Orchard Tech)