Former Fonterra chairman Sir Henry van der Heyden believes the co-operative will come out a stronger global player post-COVID-19.
“It’s a question of how they will buy their food and how will the distribution channels will be affected,” he told Rural News. “As I am reading it, restaurant sales will be down and it’ll affect some product lines, but retail sales will continue and home delivery will boom.
“Online sales in China are bigger than anywhere else in the world and I would guess that home delivery will be the way that people get their food with minimal contact with other people and risk of infection.”
Loughlin says, from a NZ perspective, it will depend to a large degree on the circumstances of the individual companies, who their partners are and what their channels to the consumer are.
Meat processor Silver Fern Farms (SFF) says it’s closely monitoring the situation in China.
Chief executive Simon Limmer told Rural News that businesses, ports and government departments remain operating at restricted capacity. He says people are still under movement restrictions and in many cases cannot get to work, or back home, potentially for at least until February 9.
“Road transport through to our customers, and from their facilities to retail outlets, is a potential pinch point. This will be having an impact on both retail supermarket and food service sales in restaurants. Though the extent of this disruption is not yet known.”
Silver Fern Farms chief executive Simon Limmer.
Limmer says SFF have resolved some early challenges in dealing with the coronavirus crisis – especially around balancing cold storage and processing capacity.
He says by making some changes to their market mix, albeit at lower market returns, they have got back on track with processing volumes. Limmer says SFF has a good market split across much of the carcase for lamb and beef that give it alternative options to they can deal with situations like this.
“The changes enabled us to process our forecast levels for mutton – which was a good outcome last week. We have marketed mutton well to China and it is the most valuable global market for mutton,” he adds.
“Demand, and the high prices paid for the product, is invaluable to our industry. We have options for managing near-term mutton production so we can continue processing farmers’ stock.”
Meanwhile, Limmer says SFF is aware of the extremely dry seasonal conditions facing many of its suppliers. He says its livestock team are looking after farmers to ensure they can manage feed situations and the company is running overtime across the majority of it plants to assist in getting stock away.
“The coronavirus outbreak is a dynamic and changing situation and we will continue to assess our options daily,” he says.