VICTORIA’S Spring lamb slaughter capacity could be cut by up to 250,000 lambs if COVID-19 workforce restrictions continue until November, Meat & Livestock Australia modelling has indicated.
Metropolitan processors in Victoria have had to cut their workforces by 20 percent meaning there is less capacity to process available lambs.
A number of regional plants also Melbourne boning rooms which means that effectively half of the state’s meat processors are working at reduced workforce capacity.
MLA said the Victorian lamb production is expected to be 450,000 higher this year than the 10-year average.
The spring flush of new season lambs is yet to hit, but MLA modelling has indicated that the Victorian government’s restrictions on processing capacity could see spring slaughter volumes cut by 250,000 lambs if they extend through until November.
“A worst-case scenario, which would include all Victorian processors being hit by the restrictions until the end of spring, would reduce the state’s ability to process lambs by 645,000 lambs,” MLA said.
MLA said Victoria accounts for almost 50pc of lamb slaughter in Australia, and also draws lambs from South Australia and New South Wales.
“In 2021, lamb numbers in Victoria are expected to be 455,000 more than the five-year average, and 450,000 more than the 10-year average, at approximately five million head.
“These lambs above the 10-year average will also be surplus if they can’t be slaughtered,” MLA said.
Furthermore, this year’s spring flush is yet to fully hit its stride and there are still high inventories of 2020 lambs. Since the start of August, young lamb yardings are back 20pc on the same period last year. This is despite total lamb yardings for both new and old season lambs being up 30pc during this period, due to the sheer number of 2020 lambs still around.
“Considering the reduction in capacity and a bigger 2021 lamb cohort, this could mean there are over one million excess lambs this year.”
MLA said during similar lockdowns in 2020, NSW was able to lift its production by 6pc to offset the impact of reduced Victorian slaughter. A 6pc rise in NSW slaughter could see the state take an additional 100,000 lambs.
“At present, lamb prices are elevated, however, supply will be high this year due to the size of the lamb drop.
“The Victorian processor issue may also ease demand,” MLA said.