Teys cuts back operations at Wagga, as cattle supply dwindles

Beef Central, 15/02/2016

A SECOND Teys Australia export beef processing plant has announced plans to cut back its operations this year, in light of the dramatic decline in slaughter cattle availability.

Teys’ Wagga Wagga plant in NSW will reduce its daily throughput from 1300 to 1100 head and reorganise its operations, meaning a number of positions will be made redundant.

cargill teys logoA company statement issued this morning said the decisions were made in order to ensure the sustainability of the Wagga business, under current cattle supply conditions.

The changes will take effect progressively from next Monday, February 22.

Just last week, Teys announced similar reductions and redundancies at its Lakes Creek plant in Central Queensland.

The company said the cattle supply shortage, due primarily to the drought and compounded by the increased demand from the live export sector, was expected, and was predicted by Meat & Livestock Australia.

As reported on Beef Central last week, cattle have been sourced for southeast Asian live export this year as far south as Dubbo.

“We are working to keep any redundancies to a minimum, and would obviously prefer to see cattle supply remain at high levels – but this is beyond our control,” Teys Australia’s corporate affairs general manager, Tom Maguire said.

He said the company was minimising impacts by offering positions at other company operations, and was using ‘natural attrition’ where possible.

Mr Maguire assured the local Wagga community that Teys remained committed to the region.

“We have invested significantly in this region and of course are still expanding the capability of our Wagga plant, which will provide employment for decades to come. Teys will also continue to provide a strong option in Wagga Wagga for producers to consider when marketing their cattle,” he said.

The company said the Wagga facility would continue to focus on production of high-value grass and grainfed beef products, underpinned by Teys premium brands including Grasslands and Riverine.

The plant, which at its peak employs 800 workers, contributes about $512 million annually to the regional economy including $187 million in household income, and supports around 3000 additional jobs in the region.

Other species affected

Other species are also being affected by current market conditions.

On Friday, JBS Australia announced that more than 100 workers at the company’s Bordertown lamb and mutton plant in South Australia would lose their jobs, due to ‘volatile market conditions.’ The company had shifted from double to single-shift operations in response to sluggish demand for red meat by consumers. Production is expected to drop from 8000 lamb per day to 5000.

JBS told workers that from February 22 it would restructure its operation to 9.5-hour, four-day rotating shifts and reduce its workforce from 549 workers to 431.

Company director John Berry said the company had made an unfortunate but necessary decision.

“We’re in a challenging situation around livestock supply across the country – both beef and lamb – and we have processed a high number of animals over the last couple of years,” he said.

“Combined with that, we have challenging international market conditions with large volumes of low-priced animal protein around the world and unfortunately Australia’s high-quality red meat is seeing some push-back from customers and markets alike in terms of the price that we’re looking to obtain.”




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