THE BRAKES are on at eastern states sheep and lamb processing plants as high global inventories and insecure livestock supplies impact winter production.
Unrelenting slaughter of sheep from long-term dry areas in Queensland and northern NSW, and record high slaughter of lamb in southern regions matched with high inventory levels has thrown a cloud over the winter marketing season and resulted in plunging livestock supplies for processors.
These market challenges were amplified this week by JBS Australia's decision to scale-back production at its plants in Brooklyn, Melbourne and Bordertown, South Australia, impacting 260 positions.
Following the news, company director John Berry said JBS was not the only plant being affected by problems in the marketplace, which included difficulties moving product and the rising cost of mutton.
"The company's decision will, for the short term, cease second-shift operations at Brooklyn and Bordertown but nothing will change for Cobram or Longford," Mr Berry said.
The decision will affect 200 staff at Brooklyn and 60 staff at Bordertown, but these employees have been stood down and not made redundant.
The decision by processors to slow production at this time of the year is not an unusual occurrence, with actions like this regularly reoccurring on an annual basis, mostly in the months of July and August.
Thomas Foods International livestock manager Paul Leonard said record kills earlier in the year had caused a hangover of product in some importing countries including China, United States as well as domestically.
"Now the winter supply has tightened and pressure has returned to the market for numbers, most processors are now governed by decisions they made earlier in the year regarding their participation in forward contracts and where their livestock purchase costs currently lie," Mr Leonard said.
The Australian Lamb Company livestock manager Ben Verrall echoed these market observations and said saleyard supplies had eased.
"It has become difficult to ask (importers) for more money when they're not requesting more product," he said.
