Throughput vital to meat works

Press, 20 July 1979, Page 8

Throughput vital to meat works

Freezing companies need to have the maximum possible throughput in order to. minimise killing costs, the director of the New Zealand Freezing Companies’ Association, Mr Peter Blomfield, said this week in a statement supplied to the Press Association. “Most companies need 80 to 90 per cent of their annual throughput during the peak period just to cover fixed overheads. Therefore it follows that the more stock killed, the better chance a company has to maximise use of facilities and keep processing costs down,” he said. However, at present there was a limitation in livestock numbers available for slaughter. This was not taken into account by those who thought that the removal of licensing controls in the freezing industry would create more competition.

“To suggest a reallocation of present killing facilities in the hope of creating more competition is merely recommending a policy of reducing existing companies’ throughput. The last season showed that we could have easily coped with more stock,” Mr Blomfield said. The expected increase in lamb kill next season is five per cent or 1.2 M, which was less than one week’s kill for the industry at the peak of the season. “There is insufficient evidence to support a cal! for more competition, which will only tend to spread more thinly an already thinly-spread commodity,” he stated. “There also appears to be a lack of appreciation of the efforts freezing companies are making to hold costs. The industry is particularly concerned at the increased burden of costs

being loaded onto the carcase and unless this movement is arrested farmers’ returns will be further reduced,” Mr Blomfield said. “It is well known that labour costs contribute 60 per cent to over-all processing costs; but it is not so well known that general managers and union officials have already met three times this year to discuss, among other things, ways of reducing the cost on the carcase.” Mr Blomfield said companies were wanting to reduce manning levels on mutton chains, which would not only improve productivity but help to hold processing costs. “The industry is sensitive to the impact increased costs are having on farm profitability and therefore the on-farm investment which is crucial to future farm production.”