Victorian lamb producers could be the big losers if processor workforce restrictions are not eased and there is less competition in saleyards.

VICTORIA’S prime lamb producers could lose hundreds of millions of dollars if their State Government does not ease processor workforce rules imposed as part of Stage Four COVID-19 restrictions.

The Victorian Government on September 6 will outline the pathway out of Stage Four restrictions, which have included a 33 percent cut in peak workforce levels and other measures at the state’s red meat processing businesses to limit virus risk.

However, there is widespread industry concern that the processor workforce restrictions have severely limited Victoria’s processing capacity just as the spring lamb turn-off is starting, potentially limiting buyer competition at saleyards and returns to producers.

Recent comments by Premier Daniel Andrews that meat processors would not be returning to pre-COVID practices and the Victorian upper house passing a bill to extend state of emergency powers in Victoria for six months has intensified the industry concern.

Although there have been COVID-19 clusters linked to workers at Melbourne and Colac abattoirs, several other regional processors, including plants at Stawell, Kyneton, Warragul, Warrnambool, Swan Hill and Geelong have managed to avoid infections in their workforces.

One regional Victorian processor told Sheep Central the big issue with the workforce restrictions will be the impact on lamb producers.

“Unless they lift the restrictions on processing, there will be hundreds of millions of dollars in revenue that is going to be lost to the farmers.

“The lamb season is about to start, we’ve had a good season and the farmers have had five years of drought and the first time they look like they are going to have some lambs on the ground they are going to get crucified on price because we haven’t got the throughput,” he said.

“He (the Premier) did say there is going to be a different set of rules for regional Victoria than for the cities, but whether that means the meat industry or not I don’t know.”

Lamb producers should get government compensation – Vallance

VFF Livestock president Leonard Vallance

Victorian Farmers Federation Livestock president Leonard Vallance said the COVID-19 pandemic’s global economic impact had already cost Victorian lamb and wool producers millions of dollars from lower prices.

He believed these losses would increase if processors were unable to compete for and process all the lambs due to be turned off in the next six months.

“All abattoirs are being treated the same, when they should be on a case-by-case basis.

“The ones that are able to facilitate processing should be able to operate at near-peak capacity.”

If the workforce restrictions continued during the spring lamb turn-off, less competition for lambs would drive prices lower, costing producers who have to market lambs when they are ready, he said.

“I would argue that if an abattoir in regional Victoria has not had a (COVID-19) case in its town or the plant and they are able to provide a safe working place for their employees that they should be able to operate at the level they want to.

“This is imposing draconian regulations on an industry that has done its utmost to comply to maintain our export markets and our market share domestically,” he said.

“The Premier should start compensating the prime lamb producers of Victoria, the price has already dropped from 900c/kg to around 600c/kg.

“So that’s a 30pc reduction in income in an industry recovering from bushfire, floods and drought,” Mr Vallance said.

“The industry needed this good year.

”We’ve got a Premier that quite clearly doesn’t understand the issues around risk assessment, managing disease risk and the risk to the economy, and the welfare of people in regional Victoria,” he said.

“The (processing) industry is getting extremely nervous about its ability to operate and kill the stock – they’ve gone from ‘we can make it work to desperation’.

“We’re verging on serious animal welfare issues with shearing with border restrictions and we’ve already got veterinarians unable to attend to livestock forcing them to be destroyed,” he said.

“The government should be out promoting exports to maintain the rural economy.”

Mr Vallance said Victorian lamb processors should be at least allowed to operate at similar levels to the chicken sector, which was allowed a 20pc workforce cut concession.

“The (processing) industry tells me that they can work at 80pc and the chicken industry has proven that they can, so why can’t a lamb abattoir work at that level?”

Australian Meat Industry Council chief executive officer Patrick Hutchinson was not available to answer any questions before this story was published.