Possible closure of Timaru meatworks 'exacerbates' risk of similar closures

The proposed closure of a Timaru meatworks "exacerbates" the risk that more of these announcements could be made around the country, Beef + Lamb New Zealand says.

About 600 workers at Alliance Group's Smithfield meatworks face the loss of their jobs after the company revealed its plan to close the Timaru processing plant.

Staff were told on Friday they would be offered jobs at the company's other processing plants - but a significant number of redundancies were expected.

Beef + Lamb New Zealand chair Kate Acland said it had been a "challenging time" for farmers and processing companies "due to the significant decrease in sheepmeat prices in the last few years, and spiralling costs on farm and along the supply chain".

She said there had also been a significant decrease in stock numbers, particularly sheep, in the last couple of years largely as a result of the conversion of sheep and beef farms into forestry, driven by the ETS.

Acland said the red meat sector exports was worth about $12 billion annually and supported 90,000 jobs across the country, "particularly in regions like South Canterbury".

The proposed closure, if confirmed, would have a "significant impact on the local economy and people of Timaru".

The announcement reinforced the need for a decision by the government around carbon farming and climate change regulation, she added.

"Our sector needs certainty that controls will be put around the amount of land that can be converted into forestry and that there will be no price on agricultural emissions. The sheep and beef sector has already reduced its emissions significantly in the last few years as a result of land-use change, the threat of a future price only adds to uncertainty.

"Our sympathies go to the staff and families affected by Alliance's proposal to close its Smithfield plant."