Low sheep supply forces JBS plant closures in Australia
In March, multinational meat processor JBS announced month-long closures at two of its lamb processing plants in southern Australia. However, the company has said both plants will now remain closed for the “remainder of the season”.
The processor has not yet committed to a date for the reopening of the plants as it looks set to hold out for a better understanding of lambing rates in the spring. The closures are set to affect 327 JBS employees.
The developments have raised fresh concerns about the oversupply of meat processing facilities in Australia, especially in the southern part of the county. There has already been a number of plant closures since January, while other plants are said to be struggling to survive, with some resorting to loss-making three-day kills.
Figures released earlier this month revealed Australia is expected to process 2.7m fewer sheep this year. Mutton slaughters are forecast to be the second-lowest on record, while lamb production is also set to fall by 6%.
Supply is not the only factor affecting processors, however. With an under-supply of sheep on the market, farmers are demanding a higher price for their animals. This season’s sheep prices are projected to hit record highs, having already reached upwards of $6/kg (€4.20/kg) putting extreme pressure on processors in an already volatile market.