High lamb prices have forced a temporary halt to processing at Goulburn’s Southern Meats abattoir.
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The high quality export abattoir stopped processing on Tuesday, West Australian Meat marketing cooperative chief executive, Coll MacRury confirmed.
But he expects operation to recommence at the end of next week.
Mr MacRury said the facility was having “a breather” following completion of orders for the Northern Hemisphere trade.
“Lamb prices are just out of this world and at this rate, processors will end up going broke,” he said.
“It is just a seasonal issue. Lamb has not done well with the heat and graziers are holding stock back to feed them up. We just have to adjust our business cycle.”
Lamb prices last week were averaging $7/kg. Southern Meats prefers them at about $5 to $5.50/kg. Mr MacRury said prices were already dropping back and he expected them to be at a more affordable level by the time processing resumed.
The abattoir is one of Goulburn’s largest employers. The chief executive said workers weren’t happy about the decision but understood the industry’s cyclical nature and the need to manage operations correctly to ensure their long-term future.
Manildra Meat Company announced last week it would close Cootamundra abattoir today and shed 200 jobs due to high stock prices. Mr MacRury predicts more industry casualties given the number of abattoirs, available stock and some operators’ debt levels. But he believed Southern Meats’ future was secure.
“We have a strong enough balance sheet. Our plant on the west coast had a very strong season...At Goulburn we were flat out until we made the decision to stop processing.”