An Ashburton farmer said the proposal to close a Timaru meatworks is a “sign of the times” and reflects the ongoing struggle of the meat and wool industries.

In a shock announcement last Friday, food cooperative Alliance Group proposed to close the Smithfield meatworks in Timaru by the end of this year.

The closure would leave 600 employees at the plant jobless, and hugely impact the Timaru community, if it goes ahead.

Alliance chief executive Willie Wiese said the proposal was due to “surplus capacity” in the company’s plant network, claiming sheep processing numbers had decreased because of land use changes.

Federated Farmers said the situation was a “symptom of broader issues” that will continue to undermine the primary sector if left unchecked.

“We’ve had a decade of policy that has favoured forestry over farming, incentivising planting radiata, particularly for carbon revenue,” meat and wool chairperson Toby Williams said.

“This year’s stock count showed sheep numbers slumped by another million or so in the last year, to 23 million.”

He said the people of South Canterbury “will feel this [loss] the hardest,” and called it an example of undue regulations stifling farmers.

Federated Farmers Mid Canterbury Meat and Wool chairperson and Alliance associate director Ross Bowmar, agrees with Williams that land use changes were a factor in the closure, but said “its not just about pine trees”.

“Its about the profitability of sheep and beef farming in New Zealand.

“The industry has been hit by inflation very hard, and at the same time we had increase in supply out of Australia, decrease in demand out of China, and increase in supply out of Australia, so its the perfect storm that resulted in less animals.”

Bowmar said Alliance was looking for the best outcome for people through the closure process.

“Its not a process that has been entered into lightly, and its unfortunate the way the numbers have diminished relative to the capacity across the sector.”

Ashburton beef farmer Chris Bell agreed that while land use change was a factor in the closure, farmers were transitioning out of sheep and beef due to profitability.

“There’s not enough going back to the farmer.”

Dairying and forestry were offering more security and longevity.

“In Mid Canterbury, we have got out of sheep and beef and into dairy. And if you can’t get into dairy, then you would go into trees.

Bell said the closure was a “sign of the times,” and that it’s difficult to profit in the face of decreasing production and increasing costs.

“Now everyone knows if you are trying to make money from [sheep and beef], it just doesn’t work.”

“It’s a decline in profitability that is leading people down other avenues.”

Alliance said staff would be offered the chance to apply for work at the company’s other processing plants “wherever possible”.

Meatworkers Union national secretary Daryl Carran told the NZ Herald a final decision would be made in two weeks.

“But inevitably, I think we know with the declining stock numbers, that was the main reason for today’s announcement,” he said.

“I don’t think this will be the last one.”

Consultation on the proposal wraps up on October 11, and a final decision made the week after.

By Anisha Satya and Claire Inkson