Break in production line
JOHN Dee Abattoir will suspend production for two weeks next month, as the beef industry continues to face hurdles nationwide.
The 430 employees on site at John Dee will take a two-week break from production, which, after planning, will coincide with the September school holidays.
During the suspension, workers will draw on accrued leave.
John Dee spokesman Warren Stiff said the break was due to a combination of reasons.
“Cattle have been expensive and in short supply, and meat sales have been sluggish and at historical at low prices,” he said.
“The dollar is down today and there has been such volatility, you can’t make any decision based on a single day.
“I know I said it (not long ago) but it’s just a very tough time for the industry. Trading conditions continue to be tough.”
The employees were told of the planned production stoppage in the first week of July, eight weeks in advance.
The temporary suspension comes two months after Toowoomba’s Beef City had to endure a similar two-week freeze.
Mr Stiff said there had been a level of concern from staff, but not widespread panic.
“Beef City was the first export plant we saw take a production break and then we’ve just had notice Kilcoy has dropped their weekend shifts for the month of August,” he said.
“In a time like this you have to keep a very close watch on all markets and plan production accordingly.
“Forecasting market conditions too far ahead in such volatile situations is extremely risky.”
John Dee Abattoir is the largest employer in Warwick, with more than 450 staff altogether.
When Meat and Livestock Australia (MLA) released its mid-year beef and cattle industry projections at the end of last week, they highlighted the same concerns Mr Stiff outlined.
The short-term outlook reflected the impact of the high Australian dollar; contraction in global beef prices; increased competition from US beef in north Asia and weak returns from the Japan market.
MLA said the strength of the Japan market continued to have a “critical influence” on the Australian cattle industry.
“Exports for 2011 are forecast to decline 3% to 345,000 tonnes,” the spokesperson said.
MLA’s forecast for distribution of beef exports for the rest of the year also highlights the importance of Australia’s export beef markets outside the top three markets of Japan, Korea and the US.
Forecasts for 2011 include Russia to receive 75,000 tonnes of Australian beef, up 32% year-on-year and South-East Asia with 90,000 tonnes.