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Meat processors focusing on keeping plants open as Coronavirus spreads

16th Mar 2020 / By Alistair Driver

The British Meat Processors Association (BMPA) has said plants will do all they can to keep open as the impact of coronavirus in the UK grows.

abattoir workers2The meat processing sector faces a number of challenges as UK braces itself for significant further spread of the COVID-19 virus, with potentially huge economic impacts, domestically and globally. These include market disruption and potential labour shortages.

“This is a fast changing situation at the moment with things changing, almost on an hourly basis as more information comes through," BMPA chief executive Nick Allen told Pig World.

“It is really difficult to assess impact at the moment as, not only are there restrictions being put in place country by country but transportation routes are being disrupted.

“At the moment, plants are focusing on taking as many precautions as they possibly can so that they can keep open and keep the supply of food rolling.”

'Cautious market'

The market has been ‘very cautious’ as the supply chain reacts to the fast-changing picture regarding Coronavirus, according to Thames Valley Cambac.

In its latest market report, TVC said the main concern being voiced by the majors was whether they would have enough staff available to process and butcher meat.

“Supply increased slightly with some producers pulling forward to alleviate possible future disruption. Processor contract contributions stood on, but any contracts with a proportion of SPP appreciated due to welcome rise in the SPP of 0.38p,” TVC said.

“This was despite the SPP average weight increasing to 85.94kgs. Demand from the fresh meat market was a touch better, helped by the lack of import pressure.”

China Shipping LineThe initial trade impact of the virus was on exports to China, the first country to be affected, with reports of shipments into being delayed and cancelled due to logistical difficulties at Chinese ports and, in January, flat demand during the usually buoyant Chinese New Year holiday.

However, there were no signs of any knock-on effects on pork prices during February. In fact, while the UK price was static, average EU prices rose by around 9p/kg during the month to average €192.92/100kg (about 171p/kg), fractionally ahead of the UK reference price.

AHDB lead analyst Duncan Wyatt described this as ‘remarkable’, given the reports of ‘congestion getting exports into China’, allied with weak European demand, suggesting that ongoing tight supplies situation had outweighed any negative demand issues.

“Strong underlying market fundamentals remain. Covid-19 is causing logistical difficulties in the short term, but it is also thought that it might delay herd-rebuilding efforts,” he added, pointing out that Chinese wholesale meat prices have been rising.

However, in his weekly market update on Friday, valuer and industry commentator Peter Crichton noted that the German price, which had soared by about 15p in February to reach the equivalent of 181p/kg had ‘taken a tumble’ in early March to around 176p/kg, ‘with possibly more to come in the future’.

“Markets dislike changes which can unsettle the whole industry,” he said.