The Country 26/05/25: Tom Young talks to Jamie Mackay

Affco’s national livestock manager comments on record red meat prices. But is it enough to save the industry from further decline?

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Episode Transcript

Speaker 1 (00:00):
Let's have a look at the state of the nation
when it comes to the red meat industry, and it's
looking pretty rosy at the moment. Lamb nine dollars, beef
eight dollars, mutton nearly five dollars. Tom Young National Livestock
managed for AFCO. I reckon, you've got to have like
a ten dollar winter Lamb contract out in the market.
Tell me, you tell me you do?

Speaker 2 (00:20):
Oh hi, Jamie, Well, no, I have an excy but
I'm getting close. So we've got a We've got a
contract that is a guaranteed bnomum price that maxes out
at nine dollars seventy in the South Island at the moment.
So yeah, we're getting there. And if the market, obviously,
if the market goes there and the farmers on a
guaranteed price will we'll get the spot price of the day.
So perhaps it we'll get to ten. Who knows, well,

(00:42):
let's hope.

Speaker 1 (00:42):
So look, when I look at lamb nine dollars or
nudging nine dollars, it was six bucks last year at
some stage of the season, so that's like a fifty
percent increase. Mutton a wee while ago was worth next
to nothing, you know, now a big fat use well
over one hundred bucks, but beef eight dollars.

Speaker 2 (01:01):
Yeah, So the prices of all the stock classes are
some of them are obviously at record levels, so hopefully
farmers are enjoying that. What is a process of what
we're experiencing is I guess a decline in numbers that
we haven't seen for quite some time. So both islands
are well behind on both beef and ovine kelly. So

(01:26):
it's probably just getting harder to run these plants sufficiently
with the lack of volume. And I think part of
the reason we're seeing a big demand, well a big
spike and price too, is simply not the meat available
both out of New Zealand but also globally, so obviously
that's pushing the price along quite steadily.

Speaker 1 (01:45):
Well, was it Beef and Lamb's economic service They do
their yearly forecast or whatever, and they were picking that
the lamb crop crop available for slaughter was going to
be down by a million lambs. By the sounds of things,
that could be even more than that.

Speaker 2 (02:00):
Yeah. Yeah, So the South Island years and eight, it's
about one point one million behind last year already, and
the U kills up a weed it too, which is
concerning because obviously you know, if you're killing yous now,
they're not going to have a lamb and spring. So
I would say next season in the South Island you'll
see another decline in the volume of lambs that are available.

(02:23):
In the North Island lamb kill there's ever so slightly
ahead of last year. But pre Christmas when it was dry,
anecdotally there were more lambs moved to the South Island store.
So the North Island's in for a long winter. We're
already seeing it now, to be honest, we've taken a
lot of capacity of from both islands and so it's
it's going to be a long drawn out winter for.

Speaker 1 (02:45):
Us land use change. We think, are Jeremy Rooks and
as carbon farming mates gobbling up some good sheep and
beef pastoral land. I love that. And then of course
this talk of dairy conversions. They may not necessarily be
on a sheep farm, but they may be on a
farm that had beef cattle on there. If that comes
to pass, even less red meat available, Yeah.

Speaker 2 (03:07):
Yeah, I mean, I mean this industry probably is is really,
I guess, at a crossroads with far far too much
capacity in both islands. If something needs to happen at
some point to make it more efficient, I think that
it's probably well, it's not only costing processes a lot
of money, it costs farmers a lot of money too

(03:28):
to have this inefficiency because someone has to pay for it.
So if we could lose capacity some or not lose sorry,
lose capacity somewhere and fill these plants up more and
makes for much more efficient industry, which effect you look,
effectively means more profit for both farmers and processes. So
it's not particularly enjoyable at this point in time.

Speaker 1 (03:49):
Tom Young with me from f CO and no bad
red meat slaughter pun here. But the meat industry has
always been a bit of a cutthroat industry when it
comes to competition, three cutting each other's throats.

Speaker 2 (04:02):
Yeah, it's a tough game. And you know the market's
made from day to day, even week to week, so
you've got to be all over your cost to runufactories
have a fishing factories, you've got to have your fixed
costs under control, and you've got to sell your product
well and maximize a return so you've got a good schedule,
otherwise you're not going to be able to buy the

(04:23):
product in the paddic So yeah, it's I guess the
strongest will survive the slightest challenge.

Speaker 1 (04:29):
Well enjoy the good prices while they're here. Will they
last into next season?

Speaker 2 (04:34):
I think it's every chance they will. But you know
it's a long way. It's a long way to look
that far out, to be honest.

Speaker 1 (04:40):
Tom Young, I'll look forward to catching up with you
at field days. I'll shout you a beare as long
as you shout mid lunch at the f Code team
best lunch at field days.

Speaker 2 (04:48):
Okay, no problem at all,