Concerns grow over surplus lambs due to processing restrictions

Concerns grow over surplus lambs due to processing restrictions

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IN DOUBT: Saleyards like Ouyen Livestock Exchange could see an oversupply of lambs in the coming weeks due to restrictions in abattoirs.

IN DOUBT: Saleyards like Ouyen Livestock Exchange could see an oversupply of lambs in the coming weeks due to restrictions in abattoirs.

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Farmers are concerned about the consequences of surplus lambs.

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Pressure is mounting on the state government to ease processing restrictions on abattoirs ahead of the spring lamb flush with concerns there could be a potential backlog in the coming weeks.

While abattoirs in Victoria remain in operation at a reduced level due to coronavirus, good seasonal conditions and spring rainfall - seen as recently as last weekend - are a silver lining for farmers who may choose to hold onto their lambs longer.

But industry leaders fear the draconian restrictions imposed on abattoirs to operate at 66 per cent capacity could hurt the hip-pocket of producers, and lead to a backlog of lambs before some restrictions are set to ease in late October.

Mecardo managing director Robert Herrmann said a potential oversupply of lambs could have dire consequences for the industry.

"If current restrictions on processors aren't lifted, then based on the five-year average by the middle of November there could be an extra 300,000 lambs or 75 per cent of a peak slaughter week accumulated and that would not be good for lambs prices," Mr Herrmann said.

COMPARISON: East coast lamb slaughter as captured by Mecardo.

COMPARISON: East coast lamb slaughter as captured by Mecardo.

Widespread rainfall across the Western District at the weekend brought with it some relief for farmers, but with no clear indication from the government about when processing may resume to full capacity, the Victorian Farmers Federation has called for urgent clarity.

The VFF's Livestock Council president, Leonard Vallance, said throughput capacity in Victorian abattoirs was well below 50 per cent.

"We're yet to hit the spring flush but we're very anxiously waiting," Mr Vallance said.

"The one-size-fits-all scenario doesn't work."

Mr Vallance said the industry was lobbying bureaucrats for a "risk-based assessment" of each abattoir to understand how and which plants could increase operation.

"There's a huge variation between abattoirs and it all comes down to the age of the plant, how much land it's on, whether it has undergone any upgrades and spacing to ensure safe distances between workers," he said.

Lamb producer and livestock consultant Tim Leeming, Precision Lambing, said farmers had been blessed with a good spring start but the future of red meat processing was a concern.

"The biggest concern the industry has is trying to fit a big supply of lambs through a narrow funnel when we've got processors that are only at 50pc throughput," Mr Leeming said.

"[The government] can put AFL footy teams up in Queensland and isolate them, but it's more important to work out strategies to maximise red meat processing in Victoria because that is what will drive our economy and keep protein on the table."

Mr Leeming said farmers who choose to hold onto their lambs to sell in off-peak periods would face the challenge of navigating supplementary feed costs.

"Generally you can get a premium if you hold your lambs out of season, but if you have a restricted processing, and farmers are going to hold their lambs back, it will flatten the market out," Mr Leeming said.

"If we have a 250 cents a kilogram reduction on price received because of a reduction in processing, our on-farm profit will be smashed and if we don't make money, we won't be able to spend it."

The government said it was working with industry to ensure supply chains were not affected by restrictions.

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